Govt loses Rs 50bn revenue in first five months of fiscal
Kathmandu, December 29
The government has failed to meet 31 per cent of its revenue collection target in the first five months of the current fiscal year due to unfavourable economic situation prevailing in the country caused by the border blockade since last three months.
This means that the state’s income will take a hit this fiscal. The government has set a target to collect revenue worth Rs 475 billion in the current fiscal.
The government had set a revenue collection target of Rs 162.59 billion for a period between mid-July to mid-November. However, total collection in the first five months stood at Rs 112.81 billion, according to the Revenue Division of Ministry of Finance (MoF). The government missed its target by Rs 49.78 billion in the review period.
Revenue collection from the Department of Customs (DoC), which contributes 50 per cent to the total tax revenue, dropped heavily as trade volume was squeezed due to the border blockade organised by the agitating Madhes-based political parties. DoC was able to collect Rs 46.47 billion in the first five months, against the target of Rs 78.23 billion. The DoC collects customs tariff, value added tax (VAT), excise and other taxes at the border points.
Despite the significant decline in revenue collection, there has been no significant change in the revenue composition. VAT is the major contributor in the revenue system, followed by customs tariff, income tax, excise and others.
VAT contributed 36.94 per cent, customs 21.04 per cent, income tax 19.45 per cent, excise 16.45 per cent and other taxes 6.11 per cent in the total collection.
In the review period, the government was able to collect VAT amounting to Rs 36.57 billion, which is 67 per cent of the target of Rs 54.67 billion. Customs tariff collection stood at Rs 20.83 billion against the target of Rs 31.65 billion. Similarly, the government collected Rs 19.25 billion from income tax against the target of Rs 23.70 billion in the review period.
Collection of excise also dropped significantly in the first five months of the fiscal. The government had set a target of collecting Rs 24.81 billion from excise. However, collection under this heading stood at only Rs 16.29 billion.
The government failed to meet its target on all tax and non-tax headings. The government was able to collect Rs 98.99 billion from tax revenue and Rs 13.82 billion from non-tax revenue in the first five months of this fiscal.