Customs dept misses revenue collection target by 38.72 per cent

KATHMANDU: Revenue collection at customs points was significantly affected in the first five months of the current fiscal year, as border blockade choked the country’s imports from India and third countries.

The Department of Customs (DoC), today, said it had missed the collection target by a whopping Rs 29.75 billion in the first five months of this fiscal. DoC had aimed to collect Rs 76.84 billion in the first five months (mid-July to mid-December). However, the collection stood at a mere Rs 47.09 billion — a shortfall of 38.72 per cent.

For a largely import dependent country like Nepal, revenue is mostly generated from customs points. Therefore, the continuous and prolonged obstruction in the movement of vehicles laden with daily essentials, fuel and industrial raw materials at Nepal-India border points severely hit revenue collection in the review period.

The Customs Offices, where there are no disturbances, have been providing services till late night for clearance of goods along with the start of border-blockade organised by Madhes-based political parties. However, the move was insufficient to offset the revenue loss because the country’s major supply route — Birgunj-Raxaul — has remained blocked by the agitating parties since almost three months. Moreover, vehicular movement through other major border points — Bhairahawa, Nepalgunj, Biratnagar and Kakarvitta that were peaceful — was also erratic.

Revenue collected at customs points account for 44 per cent of the total revenue and 50 per cent of total tax revenue.

The daily revenue collected through the customs points during normal times hovers between Rs 500 to 600 million, according to Damodar Regmi, deputy director general of DoC. “The collection amount plummeted to Rs two to three million per day when the agitating parties began tightening the blockade at the major border points.”

However, the movement of vehicles laden with daily essentials and industrial raw materials from major border points, except Birgunj, has started to accelerate since the last week. With this, the daily collection from the customs points has also gone up to Rs 350 to 400 million, Regmi informed.

The border blockade has also adversely affected all the economic activities within the country. Almost all industries along the Birgunj-Hetauda and Sunsari-Morang corridor have remained closed since the beginning of the protest in the Tarai since the last four months.

Even industries that are located in other parts of the country have been forced to operate below capacity because of lack of raw materials and shortage of diesel to run generators. The disruptions in the supply chain have also affected consumption, service and agricultural sectors.

In view of the unfavourable economic situation, the government has also extended additional time of one month (mid-November to mid-December) to the taxpayers to submit their tax details of the first four months, according to Rajan Khanal, revenue secretary of the Ministry of Finance.

The government has set a target of revenue collection currecyworth Rs 475 billion this fiscal — a goal that will most definitely be missed in light of the recent developments.