VAT collection misses target by 5 percent

KATHMANDU, MAY 25 -

Despite impressive overall revenue collection, value added tax ( VAT ) collection has missed the target as of mid-May this fiscal year. Revenue collection reached Rs 234.45 billion in the period, but the biggest contributor to the government’s revenue, VAT , missed target by 5 percent.

VAT collection reached Rs 68.29 billion, 95.02 percent of target while overall revenue collection exceeded target by 3.72 percent, according to the Finance Ministry. The revenue target for first 11 months was Rs 226.05 billion.

Income tax collection reached Rs 52.12 billion, exceeding the target by 7.84 percent, and customs duty collection amounted to Rs 46.73 billion, exceeding target by 23.82 percent, amid increased imports.

Excise duty collection stood at Rs 29.05 billion, registration fee and vehicle tax collections were Rs 4.02 billion and Rs 3.90 billion, respectively. Non-tax collection totaled Rs 30.34 billion.

The Finance Ministry said revenue collection improved due to administrative reforms, reliable customs valuation and effective implementation of classification of imported goods.  Simplified checking process, control of leakage and effective inspection to check the smuggling in border areas have also been identified as the reasons behind the increasing revenue collection. Finance Secretary Santa Raj Subedi said increase in imports along with increase in inspection frequency, action against users of fake VAT invoice, making tax evaluation and research more effective and clear work plan to recover the tax dues helped increase revenue collection.

Source: The Kathmandu Post