Kathmandu, September 14
Did the government set its sights too high in setting the annual revenue collection target of Rs 730.05 billion for this fiscal? It would seem so if first moth’s revenue collection is anything to go by.
The government missed the revenue collection target by Rs 5.67 billion in the first month of current fiscal, with shortfall witnessed in major tax headings like customs tariff, value added tax (VAT), income tax and excise, among others. The government’s revenue collection in the first month of this fiscal (mid-July to mid-August) stood at Rs 45.79 billion against the target of Rs 51.46 billion, according to the Revenue Division of the Ministry of Finance (MoF).
The MoF has said that the shortfall in customs tariff was due to disturbances in flow of trade. As per Bishnu Nepal, joint secretary at the MoF, import from India came down substantially immediately after enforcement of goods and services tax (GST) in India, as Indian traders and customs points had to abide by the new GST rules. Likewise, damages on bridges and railway tracks in the Indian side dried up the revenue collection at Biratnagar customs point and disturbances in flow of cargo containers through Nautanwa to Bhairahawa route also caused shortfall in customs revenue.
|Value Added Tax||18.8||15.4|
|Education Service Tax||0.13||0.11|
|Health Service Tax||0.3||0.21|
Rs in billion, Source: MoF
“As the country’s trade was lower than expected, the major taxes collected at the customs point namely, customs tariff, excise and VAT, were adversely affected,” said Nepal.
However, the data unveiled by the Department of Customs show that the country’s import surged by 23.57 per cent as compared to the corresponding period of the previous fiscal. The government had collected Rs 7.85 billion from customs tariff in the first month of fiscal 2016-17, when the country’s total trade stood at Rs 77.12 billion. Surprisingly, collection of customs tariff in the first month of this fiscal stood at merely Rs 7.83 billion, when the country’s foreign trade stood at Rs 93.41 billion.
Collection of VAT, excise and income tax was also below the set target. The government has missed VAT collection target by Rs 3.40 billion as it collected Rs 15.40 billion against the target of Rs 18.8 billion. Income tax collection stood at Rs 9.18 billion against the target of Rs 10.22 billion.
Similarly, excise collection stood at Rs 6.42 billion against the target of Rs 6.64 billion. There was also shortfall in collection of registration tax, vehicle tax, health and education service tax as well. Collection under non-tax heading stood at Rs 2.22 billion against the target of Rs 2.55 billion, as per MoF.
The government, however, managed to exceed the collection target under other taxes heading as collection under this heading stood at Rs 2.4 billion against the target of Rs 1.1 billion.
A version of this article appears in print on September 15, 2017 of The Himalayan Times.