Nepal has comparatively few provisions on campaign finance. It does not specify the permitted source of funds or require the sources of funding to be declared. All candidates must file post-election spending statements with the Election Commission of Nepal (ECN), but the ECN does only a formal check of these documents and does not audit them or make them public. There is no field monitoring of spending by parties or candidates.
As there is no public campaign financing in Nepal, political parties rely on party member contributions, the personal resources of nominated candidates, and/or cash or in-kind donations for campaign expenditures. Candidates also collected contributions through networks of well-wishers, called in favors, or relied on logistical support from members of sister organizations to recover some of their campaign expenditures. It is a common practice in Nepal that the most first-past-the-post candidates had to rely on their own resources and, besides campaign materials or loudspeakers, received little or no financial support from their parties. For candidates from smaller parties without personal wealth, this severely limited their campaign activity. At times, it was cited as a reason for the failure of political parties to nominate more women in the first-past-the-post races.
Bans and limits on private income
In Political Parties Act, 2058 the law bans acts include an act to accept grant or donation from international organization, institution, foreign government, person, association or institute.
Regulations on spending
The ceiling of the amount allowed to be expended by the candidate in the election under First Past The Post Electoral System and by the Political Party in the election under the Proportional Electoral System is determined by the Commission upon a notification published in the Nepal Gazette. In 2013 Elections, the spending limits were set at NPR 1 million for each first-past-the-post candidate and NPR 70,000 for each proportional representation candidate.
According to Election Offences and Punishment Act, No 2, 2007, No person acting on behalf of any political party or candidate or his or her agent or other person shall, during the period of election, give or agree to give any voter cash or kind as a present, reward, gratification, donation or gift to exercise or refrain from exercising his or her right to vote or for the exercise of or refraining from exercising his or her right to vote; and even the voter shall not receive or agree to receive such cash or kind for himself or herself or any other person for that purpose.
The use of vehicles from the government or the state-owned organization in campaign activities is also prohibited.
Reporting of annual income and expenditure
Each party should maintain its account and the accounts should be audited by an auditor recognized by the Auditor General. Election expenses made by the party should be mentioned in its account.
Each political party should submit annual report of its income and expenditure to the Commission within 6 months from the ending of each fiscal year. The party must declare the name, address, profession of the person and the name of corporate body which has donated more than 25 thousand Rupees.
The party should disclose the annual report to the public within 6 months from the date of ending of the each fiscal year. The Commission should evaluate the annual reports and publish a comprehensive report. Parties that do not maintain accounts or submit financial reports may be fined up to 100 Rupees.
In the case of the Proportional Electoral System, the statement of election expenses should be given to the Commission by the Political Party within thirty five days after the declaration of the election results and the expenses incurred in the case of the candidates of the election under the First Past The Post Electoral System the same shall be given to the District Election Office by the candidates or their agents within thirty five days after the declaration of election results. The District Election Office shall have to forward the statement of expenses so received to the Commission.
State funding
In terms of state funding, there is no financial support to parties, however, there is a provision to media access as the broadcasting services shall provide free air time to any political party taking part in the election under the proportional electoral system in proportion to the total candidates fielded by it, for the purpose of canvassing.
While providing free time, it shall be divided into a total of three phases and radio and television time shall be provided to a political party in proportion to the candidates fielded by the political party. While providing such time, in the first phase, 5-20 minutes of radio time, in proportion to the candidates fielded by a political party, shall be given to the political party for making public the manifesto of that political party; in the second phase 2-5 minutes for election canvassing through television, and in the third phase, one minute each, prior to the commencement of the silent period, shall be given to each political party for making final submission for vote on television. While so providing the time to political parties for election canvassing, the concerned political parties shall prepare materials to be broadcast in the phases mentioned above and provide such materials to the concerned broadcasting service.
No communication media shall carry any kind of election related publicity materials, political message or propagation of election campaign 48 hours prior to the polling day and such tacit period shall extend until the last polling center is closed. However, this shall not impede the communication of information provided by the Election Commission.
Source
Observing Nepal’s 2013 Constituent Assembly Election Final Report, The Carter Center, 2013
https://www.cartercenter.org/resources/pdfs/news/peace_publications/election_reports/nepal-2013-final.pdf
http://www.idea.int/political-finance/country.cfm?cc=NP