• This is the first time in a decade that the government has missed the target

Kathmandu, July 24 Contrary to the government’s earlier claim that its revenue collection overshot the annual target in the fiscal year 2017-18, Nepal Rastra Bank and the Financial Comptroller General Office have revealed that there was a gap of Rs 5.3 billion between the target and actual collection. The government had set an annual revenue collection target of Rs 730.05 billion in the previous fiscal, while the actual collection stood at Rs 726.07 billion, according to FCGO. However, Revenue Secretary Shishir Kumar Dhungana claimed that the government’s revenue collection in the previous fiscal hovered around Rs 732 billion, exceeding the target. Officials at FCGO said they had not included the expenditure arrears under revenue heading. “We have received reports from the districts that show the government’s revenue collection was below the set target in the previous fiscal,” said a high-level official at the FCGO.

Collection at a glance

Tax revenue Projection Actual Income tax Rs 186.22bn Rs 179.1bn VAT Rs 216.62bn Rs 206.8bn Excise Rs 101.18bn Rs 102.6bn Tax on foreign employment, health and education services Rs 2.27bn Rs 2.1bn Vehicle and infrastructure use Rs 27.49bn Rs 36.6bn Customs duties Rs 128.06bn Rs 126.8bn Other taxes Rs 4.36bn Rs 5.3bn Non-tax revenue Projection Actual Interest income Rs 1.56bn Rs 3.5bn Dividend Rs 17.46bn Rs 17.4bn Rent and royalty Rs 9.69bn Rs 12.1bn Income from sales of goods and services Rs 17.35bn Rs 17.2bn Penalties fines and forfeiture Rs 0.68bn Rs 0.68bn Voluntary transfers other than grants Rs 0.002bn Rs 0.001bn Others Rs 17.1bn Rs 16bn Source: FCGO Revenue collection based on the annual target is given high priority in the revenue administration since the target based incentive system was implemented in 2008 when Baburam Bhattarai was the finance minister. It is reported that the government missed the revenue collection target in the fiscal 2017-18 for the first time in the last decade. The government missed the revenue target in the previous fiscal year as the collection under the major tax heading was weak. A wide gap of Rs 9.82 billion was witnessed in the target and realisation of Value Added Tax. The government had set a target of collecting Rs 216.62 billion under VAT, but the realisation stood at Rs 206.8 billion. Meanwhile, the government was able to collect Rs 128.06 billion from customs duties against the target of Rs 126.8 billion, according to FCGO. The government also missed the revenue collection target under income tax — the second largest contributor to the tax revenue. The government collected income tax worth Rs 179.1 billion against the target of Rs 186.22 billion. Though the government missed the revenue collection target under a few tax headings, the collection under non-tax heading was encouraging. The government collected Rs 67.17 billion under non-tax heading against the target of Rs 63.84 billion.