KATHMANDU: The government is unlikely to meet its revenue collection target for this fiscal year as the revenue shortfall amount is still high at around Rs 50.63 billion till the end of the first eight months.
The government’s revenue collection has been crippled due to the prolonged border blockade that started from the last week of September and ended in the first week of February.
The government has said that it has been trying its best to meet the annual target worth Rs 475 billion. Yet, only around half of the annual target has been collected till the first eight months of the fiscal. Revenue collection in the first eight months stood at Rs 233.14 billion against the target of Rs 283.77 billion. However, revenue collection in the last month overshot the monthly target by Rs 2.97 billion.
“We have focused on non-tax revenue collection and have become stringent regarding tax non-compliance in the market,” said Rajan Khanal, revenue secretary at the Ministry of Finance. The government expects the dividend and royalty amount that it will receive in the third and fourth quarters of the fiscal will definitely minimise the shortfall.
The government received loan repayment worth Rs three billion from Nepal Oil Corporation a few days ago. Khanal further said that the government will also receive Rs 9.55 billion from cases that have been settled by the Tax Settlement Commission. Apart from that, Nepal Rastra Bank will also submit dividend of around Rs seven billion in this fiscal.
“We could easily make up shortfall of Rs 25 billion from these approximations,” Khanal said. Controlling revenue leakages is another option for the tax administration to make up for the lost revenue, but it seems difficult to make up for revenue from alternative sources that would have been collected from imports that were dampened due to the border blockade.
The government missed the target under all the major revenue headings during the review period. In the review period, the government was able to collect customs tariff worth Rs 44.50 billion, which is 85 per cent of the target. The government also missed the target of value added tax (VAT) substantially. Only 78 per cent or Rs 69.43 billion of the VAT collection target was collected in the review period.
Similarly, the government missed income tax collection target by Rs 7.28 billion in the review period. Income tax collection stood at Rs 51.35 billion against the target of Rs 58.63 billion in the review period. Excise collection also missed the target by 15 per cent and total collection stood at Rs 34.99 billion.
All the remaining tax headings namely, health and education service tax, registration fees, and vehicle tax missed the collection target. Collection of non-tax revenue stood at Rs 19.26 billion, which is a drop of 17 per cent of the target, according to the Revenue Division of the Ministry of Finance.
