FinMin eyes 30-35pc revenue growth next FY

KATHMANDU, JUN 03 -

Finance Minister Shankar Prasad Koirala said on Sunday the government will adopt 30-35 percent revenue growth target for the next fiscal year, which is expected to increase the size of the budget notably from currently fixed ceiling of Rs 506 billion.

While fixing the budget ceiling for the next fiscal year, the National Planning Commission (NPC) has set the revenue target at Rs 345 billion with a growth rate of 19.5 percent.

The government will adopt the ambitious target by revising the existing tax rates, among other measures, the finance minister said at an interaction when Chairman of the Council of Ministers Khil Raj Regmi inspected the Finance Ministry on Sunday. “Even without a tax rate revision this fiscal year, there has been 23 percent revenue growth as of the first 10 months,” said Koirala.  

Under the current growth rate, the government’s revenue collection is expected to reach Rs 299 billion this fiscal year, against the target of Rs 288 billion.

Given the Finance Ministry getting massive demand for resources from ministries exceeding the ceiling fixed by the NPC, Koirala announced higher revenue target for the next fiscal. The ministry has so far received demand for Rs 668 billion, and it expects the figure to reach Rs 750 billion when all the ministries place their demands.

Finance Secretary Shanta Raj Subedi, however, said discussions on revising the revenue target have not taken pace. But he said boosting revenue in the next fiscal year will be a challenging job as Nepal has remove the agriculture reforms fee as per its commitment to the World Trade Organization. The fee contributes around Rs 1 billion to the government’s revenue. “Nepal Oil Corporation and other institutions have demanded exemption of value added tax (VAT),” he said.

When asked about the possibility of a massive rise in the budget size due to higher revenue target, Subedi said the government may or may not increase the budget size. “The government can also take an alternative of not raising internal loans at bigger size,” he said.

The government had attained the highest revenue growth rate in a decade in 2008-09 when the revenue collection grew by 32 percent to Rs 142.21 billion. The government had targeted 31 percent revenue growth that year.

Adopt measures that benefit poor: Regmi

Chairman of the Council of Ministers Khil Raj Regmi on Sunday directed the officials involved in the budget making process to introduce measures that would benefit poverty-stricken people. He urged them first to assess the impact of the existing programme and adopt suitable measures.

Addressing an interaction organised at the Finance Ministry after his inspection of the ministry’s activities, Regmi said the budget should be able win the private sector’s confidence. “The budget should focus on the country’s total economic prosperity and uplifting of downtrodden people,” he said. He expressed concern about the growing trade deficit and high inflation which is near double digits.

Amid complaints that a high proportion of foreign aid has been not channelized through the national system, Regmi stressed on the need for regulating the aid. As per the Development Cooperation Report 2011-12 published by the Finance Ministry, 23 percent of total disbursements of foreign aid is off-budget and is not recorded in the budget system.

Source: The Kathmandu Post