Government revenue growth rate falls

KATHMANDU:

Growth rate of government revenue fell moderately in last fiscal as the pace of tax collection slowed during the year.

The government generated revenue of Rs 356.85 billion from various tax and non-tax sources in last fiscal year, up 20.6 per cent than in the same period last fiscal year, shows the latest macroeconomic report of Nepal Rastra Bank (NRB). The government’s revenue collection had grown by 21.2 per cent to Rs 296.01 billion in fiscal 2012-13.

In the last fiscal, the biggest chunk of government revenue came from value added tax (VAT). The government raised Rs 100.97 billion from VAT in the last fiscal year, making a contribution of 28.3 per cent to the total revenue collection.

VAT collected by the government in the last fiscal was 20.9 per cent higher than in the last fiscal. In fiscal 2012-13, the VAT collection had gone up by 15.7 per cent. Higher collection of VAT in last fiscal was the result of initiatives taken by government to increase the tax compliance.

Second major contribution to the government revenue was made by income tax in last fiscal. The government raised Rs 77.93 billion through income tax last fiscal, which made up 21.8 per cent of the total revenue collection.

Income tax raised by government in last fiscal was 16.3 per cent higher than in the same period previous fiscal. The government’s income tax collection had gone up by 28.1 per cent to Rs 67.02 billion in the fiscal 2012-13. Income tax growth rate fell last fiscal largely due to unavailability of licence fee from Nepal Telecom as in the previous year.

Another major contributor was customs duties. The government collected Rs 67.88 billion from customs duties in the last fiscal, making a contribution of 19 per cent to the total revenue collection.

Customs duty raised by the government in the last fiscal was 19.3 per cent higher than a year ago. In fiscal 2012-13, government’s customs duties collection had soared by 31.1 per cent to Rs 56.89 billion.

The growth rate of customs duties fell remarkably in the last fiscal as the country continued to reduce customs duties on various goods as per the commitment made by the government while signing pacts of various trade blocs like the South Asian Free Trade Agreement.

While income from various revenue sources could not grow as in fiscal 2012-13, collection of non-tax revenue surged by 23.8 per cent to Rs 45.04 billion. In the same period previous fiscal, non-tax revenue collection had dropped by 3.7 per cent to Rs 36.40 billion.

Also, income from other tax sources, like road maintenance and improvement duty, road construction and maintenance duty, jumped by 38.6 per cent to Rs 6.85 billion, shows the NRB report.

Source: THT