Revenue collection target missed

KATHMANDU:

The government failed to meet revenue collection target set for the first eight months of the current fiscal year largely due to fall in non-tax revenue.

The government had set a target of collecting Rs 245.49 billion in revenue in the eight-month period from mid-July to mid-March. But during the period, the government was able to mobilise only Rs 241.26 billion in revenue, show the latest data of Ministry of Finance (MoF).

The revenue collection target could not be met primarily because of fall in non-tax revenue. The government collected Rs 19.26 billion in non-tax revenue in the first eight months of the current fiscal year, as against Rs 26.36 billion in the same period last fiscal.

It is not exactly known why income from this source fell, as the MoF is still conducting investigation. But MoF officials said non-tax revenue would rise in the latter part of the fiscal year once collection of fines and dividend from public enterprises starts going up.

But in spite of the inability to meet the target during the review period, revenue mobilised by the government in the first eight months was 13.49 per cent higher than in the same period last fiscal. The government has fixed annual revenue collection target at Rs 422.90 billion.

During the eight-month period, the biggest contribution to the government’s revenue collection was made by value added tax (VAT). VAT collection stood at Rs 73.24 billion in the first eight months of the current fiscal year, making a contribution of 30.36 per cent to the total revenue collection. In the same period last fiscal, VAT collection stood at Rs 63.43 billion.

Second biggest contribution to the government’s revenue collection was made by customs duty. The government raised Rs 49.13 billion from customs duty in the eight-month period, as against Rs 42.91 billion in the same period last fiscal.

Collection of customs duty, coupled with VAT, went up because of rise in imports.

The third biggest contribution to the government’s revenue collection was made by income tax. Income tax collection stood at Rs 47.87 billion in the first eight months of the current fiscal, as against Rs 41.38 billion in the same period last fiscal.

Income tax collection generally rises after first six months of every fiscal year, or mid-January, because this is when firms pay their first installment of 40 per cent of the committed amount. Firms deposit second income tax installment of 30 per cent in mid-April and final installment in mid-July.

Among others, collection of excise duty stood at Rs 33.45 billion in the first eight months of the current fiscal year, compared with Rs 28.14 billion in the same period last fiscal, while income from registration fee, vehicle tax and other taxes went up to Rs 18.32 billion in the review period, from Rs 10.37 billion in the same period last fiscal.

Source: THT