Print Edition - 2018-02-23 | MONEY
Govt revenue collection jumps 20.5 percent
Feb 23, 2018-
The government’s revenue collection jumped 20.5 percent in the first seven months of the current fiscal year, as collection of value added and income taxes, and customs and excise duties, which account for a big chunk of state’s income, went up. Nonetheless, the government failed to meet the revenue collection target set for the seven-month period by a razor thin margin, as it could not expand the tax net as per its projection.
The government had fixed a revenue collection target of Rs386.3 billion for the seven-month period between mid-July and mid-February. But its collection stood at Rs384.6 billion in that period, accounting for 99.6 percent of the target, shows the latest report of the Ministry of Finance (MoF). The government was able to collect Rs319.2 billion in revenue in the same period a year ago.
“We missed the target by a slight margin despite significant increment in collection of major taxes and duties. We hope to make the recovery in the next month,” Shova Kanta Paudel, head of the Revenue Management Division at the MoF, said.
The biggest contributor to the government’s revenue in the seven-month period was value added tax (VAT). VAT collection stood at Rs109.4 billion in the first seven months of 2017-18, up 22.7 percent than in the same period a year ago. VAT accounted for 28.4 percent of the total revenue generated by the government in the seven-month period. VAT collection, however, fell short of the target set for the period by 7.4 percent.
“Minor shortfalls occur whenever data are compared on monthly basis. But we are confident about meeting the annual target,” said Paudel.
Another major contributor to the government’s revenue in the seven-month period was income tax. The government collected Rs80.6 billion in income tax during the period, marking a hike of 17.7 percent than in the first seven months of the last fiscal year. With this, the contribution of income tax in the total revenue of the government hovered around 21 percent. This collection of income tax was also below the target of Rs84.3 billion set by the government for the seven-month period.
Like income tax and VAT, collection of customs duty also fell short of target.
The government had projected collection of Rs74.2 billion in customs duty in the first seven months of 2017-18. But it was able to raise only Rs73 billion.
This collection accounted for 19 percent of the government’s total income in the seven-month period. The government had collected Rs64.3 billion in customs duty in the same period a year ago.
Among others, collection of excise duty also failed to meet the target. The government raised Rs53.7 billion in excise duty in the first seven months of the current fiscal year. Although excise duty collection in the seven-month period was 8.3 percent higher than in the same period a year ago, it was below the target of Rs54.4 billion set by the government.
Excise duty accounted for 14 percent of the government’s total revenue in the first seven months of 2017-18.
While collection of major taxes and duties was below the target, collection of non-tax revenue was almost 50 percent higher than the estimate. The government generated Rs41.1 billion in non-tax revenue in the seven-month period, up 65.4 percent than in the same period a year ago. “This was because of higher collection of fees from firms like Nepal Telecom and hydropower companies,” Paudel said.
Published: 23-02-2018 09:22