Print Edition - 2015-02-09 | MONEY
Govt misses collection target under 4 tax heads
Feb 8, 2015-
The government missed collection targets under four major revenue headings—value added tax (VAT), income tax, customs duty and excise duty—in the first half of the fiscal year, but it was able to achieve the overall target.
VAT collection hit 97.87 percent of target, income tax collection stood at 96.27 percent, customs duty collection 99.8 percent, and excise duty 95.94 percent, according to the Finance Ministry.
Thanks to a massive surge in non-tax collections, particularly from land and property registration, the government was able to collect a total of Rs 190.52 billion in revenues, against the target of Rs 185.48 billion for the first half.
Land registration fee collection stood at Rs 4.62 billion—193 percent of the target. The overall non-tax revenue collection rose to Rs 16.12 billion—119.4 percent of the target. It is surprising to see the government missing the targets particularly under import duty and VAT as imports have increased notably in the review period.
As of the fifth month of the fiscal year, imports rose 17.8 percent to Rs 318.52 billion, according to Nepal Rastra Bank. Inland Revenue Department (IRD) Director General Chundamani Sharma said the government missed the VAT target due to low capital expenditure.
More than Rs 80 billion has remained unspent in the government coffers until last week. As for income tax, Sharma said rental tax and tax on interest income could not be collected as targeted.
The government increased the rental tax target by 234 percent for this fiscal year, but collections stood just half of the target as of the first half. “The target was, in fact, ambitious,” said Sharma, adding lower interest rates on bank deposits amid excess liquidity hit the collection of tax from interest income.
As far as excise duty is concerned, a decrease in cigarette production affected collections, according to Sharma. “This is a good trend for public health, but it affected excise duty collection,” he said.
Despite not so encouraging first half, government officials are hopeful of achieving the full-year target. Finance Ministry Spokesperson Madhusudan Pokharel said there was no reason to panic as the government was well on course to attain the full-year target. “We should worry only if the annual target is not achievable,” he said.
Published: 09-02-2015 09:20