More revenue came in 2008-09
KATHMANDU: In the fiscal year 2008-09, revenue mobilisation increased significantly by 33.2 per cent to Rs 143.3 billion against a rise of 22.7 per cent to Rs 107.6 billion in 2007-08. “The revenue to GDP ratio moved up to 14.9 per cent in 2008-09 from that of 13.2 per cent in 2007-08,” said the annual report of Nepal Rastra Bank (NRB), the central monetary authority.
The government’s firm commitment to revenue leakage control, revenue administration reforms, Voluntary Disclosure of Income Scheme (VDIS) and significant growth of non-tax revenue contributed to such an impressive growth of revenue mobilisation, according to the report.
However, the value Added tax (VAT) topped the chart as it grew by 28 per cent to Rs 39.9 billion against a 17.3 per cent growth a year earlier. “The increase in VAT revenue was on account of growing imports and consumption induced by an increase in inflow of remittances and reforms in VAT administration,” NRB said.
Customs revenue rose to almost double by 34.5 per cent to Rs 26.6 billion against the increase of 18.6 per cent a year ago. It is also contributed to reforms in customs administration and increase in imports of high tax yielding vehicles and vehicles’ parts
Fuelled by a remarkable receipt under VDIS programme due to government’s strong administrative and political commitment, excise revenue increased to more than double by 45.3 per cent to Rs 16.3 billion in comparison to an increase of 21.3 per cent the previous year. Meanwhile, income tax revenue also increased to more than double by 42.5 per cent to Rs 27.4 billion in 2008-09 in comparison to an increase of 19.9 per cent a year earlier.
However, in the total composition of revenue components, the share of VAT and income tax went down while the share of excise duties went slightly up.
Amongst the components of revenue, VAT constituted a share of 27.8 per cent followed by income tax (19 per cent), customs duties (18.6 per cent) and excise duties (11.4 per cent). In the previous year, such ratios were 29 per cent, 17.8 per cent, 18.4 per cent and 10.4 per cent respectively.
Non-tax revenue plunged by more than half in the fiscal year 2008-09 as it grew by 13.9 per cent to Rs 24.3 billion against an increase of 38.7 per cent in the preceding fiscal year. Such an increase was on account of the increase in dividend paid by some public enterprises including the NRB as well as the amount received as the principal repayment from Nepal Telecom (NT), Nepal Electricity Authority (NEA).
The then finance minister Dr Baburam Bhattarai had presented his budget of Rs 236.15 billion for the fiscal year 2008-09 on September 19 and set revenue target of Rs 147.72 billion that was dubbed highly ambitious. However, his target was met easily.
Present Finance Minister Surendra Pandey has set Rs 176.73 billion as the target.