Revenue collection in Q1 encouraging, says MoF
Kathmandu, November 1
Revenue collection of the government significantly improved in the third month of this fiscal as the government has met 99.45 per cent of the target in the first quarter (mid-July to mid-October) of this fiscal. The government has collected Rs 146.81 billion in the first quarter against the target of Rs 147.61 billion, according to Revenue Division under Ministry of Finance (MoF).
In the review meeting regarding first quarter’s revenue collection organised by MoF, officials said that revenue collection significantly improved in the third month as import situation normalised and Inland Revenue Department (IRD) also ramped up market monitoring for enforcement of billing on sales of goods and services for effective collection of value added tax (VAT).
“The revenue collection situation in the first two months was disappointing as we had achieved only 90 per cent of the target,” said Bishnu Nepal, head of the Revenue Division, adding, “However, we are moving ahead on the right track to achieve the annual target along with substantive improvement in revenue collection in the third month.”
Nepal expressed hope that the government will achieve the annual revenue collection target of Rs 730.05 billion as 20 per cent of the annual target has been collected in the first quarter.
Due to huge shortfall in VAT and customs tariff there was a wide gap between the target and collection. Revenue collection was adversely hit as import was affected due to damage in railway tracks, bridges and roadways in India because of the severe floods in the second month, as per Nepal.
The MoF has also said that the collection of VAT, which is the major contributor to revenue collection, is still facing several challenges due to lack of billing enforcement on goods and services. The IRD has been urged to monitor the stocks and warehouses of goods as the MoF suspects that the tax payers have not debited — filed to tax office — VAT despite clearing the stocks.
Though the government has missed collection target under several headings like VAT, income tax, vehicle tax and non-tax, it has exceeded the revenue collection target under excise, customs tariff and other tax headings that helped to narrow down the overall shortfall amount.
As per the MoF, the government collected Rs 47.59 billion from VAT against the target of Rs 50 billion and Rs 20.34 billion under income tax against the target of Rs 20.54 billion.
Likewise, the government missed revenue collection target under registration tax as collection stood at Rs 2.02 billion against the target of Rs 2.95 billion and Rs three billion was collected under vehicle tax against the target of Rs 3.16 billion, as per MoF. The government also missed revenue collection target under education and health service tax.
Similarly, collection under non-tax also witnessed a shortfall. The government collected Rs 14.1 billion under non-tax heading against the target of Rs 15.32 billion.
However, collection under excise, customs tariff and other taxes exceeded the target. The government collected Rs 30.32 billion from customs tariff, Rs 25 billion from excise and Rs 3.96 billion under others heading, whereas the target was set at Rs 30.21 billion for customs tariff, Rs 22.63 billion for excise and Rs 3.19 billion under other taxes heading.