The government has managed to meetthe overall revenue collection target in the first half of the fiscal fromnon-tax sources like royalties from public corporations and government entities.More worryingly, however, the revenue collection under the major tax headingsmissed the set target in the review period.

Finance Minister Gyanendra BahadurKarki expressed deep concerns regarding the ‘weak’ collection performance underthe major tax headings.

The government has missed thecollection target under value added tax (VAT), income tax and customs tariff,which are the three major taxes that contribute over two-third to the totalrevenue.

Performance of VAT collection hasremained weak since beginning of this fiscal. However, collection from incometax and customs tariff were also below target in first half.

During the half-yearly review ofrevenue collection at the Ministry of Finance today, Finance Minister Karkiinstructed the tax administration to strengthen tax enforcement by plugging theloopholes and controlling leakages.

In the first half of the fiscal, thegovernment collected 45.9 per cent of the total annual target worth Rs 730.05billion and revenue growth stood at 20.73 per cent compared to thecorresponding period of the previous fiscal. The government had targeted tocollect Rs 334.14 billion within the first six months of this fiscal, whereasthe collection stood at Rs 335.1 billion, according to the Revenue Divisionunder MoF.

Collections under three major taxes— VAT, income tax and customs tariff — stood at Rs 92.4 billion, Rs 72 billionand Rs 61.95 billion, respectively. The collected amount under VAT, income taxand customs tariff were 91.6 per cent, 97 per cent and 98 per cent of thetarget, respectively.

The government has also missedrevenue collection target under registration fees, vehicle tax, health andeducation service tax. However, collection under other tax heading was nearly51 per cent above the target to stand at Rs 9.63 billion. Similarly, thecollection of Rs 46.98 billion in excise was nearly one per cent above target,as per Revenue Division.

Collection under non-tax exceededthe target by 45.68 per cent to stand at Rs 38.14 billion. This helped the governmentto bridge the shortfall witnessed in major tax headings and meet the overallrevenue collection target.

Half-yearly revenuecollection

Source:Revenue Division, MoF

Source: The Himalayan Times, 25^thJanuary 2018