Revenue collection up 22pc on import surge

KATHMANDU, APR 24 -

The government has been raking it in due to massive imports resulting in surging tax revenues. Collection has been consistently high over the first nine months of the current fiscal year, and reached Rs 210.46 billion representing a jump of 22.30 percent year on year.

According to the Finance Ministry, the government plans to raise revenue amounting to Rs 290 billion during this fiscal year, and has targeted a growth rate of 18.5 percent to fulfil the goal.

Customs duty witnessed the biggest rise of 38.89 percent, although value added tax (VAT) remained the largest contributor to revenue. VAT intake grew 15.65 percent to Rs 60.63 billion followed by income tax with Rs 48.26 billion. The third largest contributor is customs duty with Rs 41.64 billion.

In terms of growth rate, non-tax revenue grew 4.36 percent which is the lowest rate among all the categories.

“As capital expenditure slowed in the absence of a full budget, it affected VAT collection,’ said Rajan Khanal, chief of the Revenue Department at the ministry. “We hope that VAT collection will be much better as capital expenditure picks up in the last trimester of this fiscal.” He added that non-tax revenue would also grow next month after companies distribute dividends to their shareholders.

The Finance Ministry said in a press release that a rise in imports of petroleum products, readymade garments and communication equipment, scrapping of excise duty on Indian goods imported into Nepal and administrative measures to control revenue leakage were responsible for the impressive revenue growth.

The ministry also said that a growth in the service sector, particularly the emergence of banks and financial institutions and telecommunications, contributed to the rise in revenue.

REVENUE TYPE    COLLECTION    GROWTH RATE (%)

VAT                    Rs 60.63b          15.65

Income Tax         Rs 48.26b          31.12

Customs duty      Rs 41.64b           38.89

Excise duty          Rs 26.19b          20.53

Non-tax               Rs 26.35b          4.36

Registration fee/vehicle tax    Rs 7.13b    12.47

Education service tax    Rs 242.6m    43.2

Source: The Kathmandu Post