Nepal, Aug. 17 -- 27 fiscal budget deserves appreciation for one important reason. Amid competing fiscal pressures and slowing economic activity, it has committed to launching a second generation of tax reforms. The timing could not be more appropriate. Nepal's tax system has reached a stage where incremental changes are no longer sufficient. What is now required is a comprehensive reform agenda that restores public trust, promotes investment, broadens the tax base, and prepares the country for a rapidly changing economy.

But despite all the promise and hype around tax reforms with the change in government, there are signals of policy flip-flops, unpredictability, loss of trust, and even backsliding of earlier reforms. This is especially...