IRD marginally exceeds revenue collection target

KATHMANDU:

The revenue administration has been able to exceed the estimated revenue target marginally, thanks to an increase in income tax payments, in the first eight months of the current fiscal year.

The Inland Revenue Department (IRD) collected taxes worth Rs 79.25 billion between mid-July, 2013 and mid-March, 2014 which is 1.02 per cent higher than the estimated revenue collection, according to IRD statistics that was released during the department’s monthly review meeting held here today. The authority responsible for income tax, VAT and excise duty and other non-tax revenue had estimated revenue collection worth Rs 77.779 billion during review period.

The revenue administration collected Rs 41.4 billion as income tax, while the VAT and excise duty collection amounted to Rs 21.03 billion and Rs 16.21 billion, respectively. IRD’s income tax, VAT and excise duty collection has exceeded the estimation by 1.01 per cent, 1.03 per cent and 1.01 per cent, respectively.

Last year, during the period, the government had raised Rs 36.72 billion as income tax.

In addition, IRD further collected Rs 1.41 billion as rent tax, Rs 4.27 billion as interest tax, Rs 294.3 million as education service tax, and Rs 279.6 million as health service tax, during the review period.

As IRD has increased its campaigns to promote tax compliance and strictly implemented tax laws, the revenue collection has increased.

Although VAT and customs duty are still major contributors in revenue mobilisation, income tax growth is also

becoming remarkable.

“Along with expanding the tax net, improved compliance by many firms and individual tax payers is improving the share of income tax in overall revenue mobilisation,” said economic advisor to prime minister Dr Chiranjivi Nepal.

“Moreover, increasing income tax is also an indication that Nepali businesses are doing well and paying their taxes on time,” he added.

During the review meeting, IRD’s director general Tanka Mani Sharma directed the chiefs of Kathmandu’s tax

office and administration to make a strategy to achieve the revenue targets in the coming months as well. He stressed on the need to conduct more awareness programmes regarding taxes in the areas with booming economic activities.

Although the status of internal revenue is optimistic, the collection of VAT and excise duties from the country’s various customs points has not been encouraging so far this year, going by the data of the first seven months.

In addition, customs duty collection stood at Rs 37.62

billion in first seven months, which was slightly higher than the target of Rs 37.60 billion set for the period.

As the growth in import had remained more or less stable in the past seven months, customs duty and import dependent VAT collection did not increase much. The appreciation of US dollar against Nepali rupee made imported goods expensive, which in turn daunted importers from bringing in a large quantity of products.

Source: THT