Contrary to the government’s earlier claim that its revenue collection overshot the annual target in the fiscal year 2017-18, Nepal Rastra Bank and the Financial Comptroller General Office have revealed that there was a gap of Rs 5.3 billion between the target and actual collection.

The government had set an annual revenue collection target of Rs 730.05 billion in the previous fiscal, while the actual collection stood at Rs 726.07 billion, according to FCGO. However, Revenue Secretary Shishir Kumar Dhungana claimed that the government’s revenue collection in the previous fiscal hovered around Rs 732 billion, exceeding the target.

Officials at FCGO said they had not included the expenditure arrears under revenue heading. “We have received reports from the districts that show the government’s revenue collection was below the set target in the previous fiscal,” said a high-level official at the FCGO.

Collection at a glance
Tax revenue	Projection	Actual
Income tax	Rs 186.22bn	Rs 179.1bn
VAT	Rs 216.62bn	Rs 206.8bn
Excise	Rs 101.18bn	Rs 102.6bn
Tax on foreign employment, health and education services	Rs 2.27bn	Rs 2.1bn
Vehicle and infrastructure use	Rs 27.49bn	Rs 36.6bn
Customs duties	Rs 128.06bn	Rs 126.8bn
Other taxes	Rs 4.36bn	Rs 5.3bn
Non-tax revenue	Projection	Actual
Interest income	Rs 1.56bn	Rs 3.5bn
Dividend	Rs 17.46bn	Rs 17.4bn
Rent and royalty	Rs 9.69bn	Rs 12.1bn
Income from sales of goods and services	Rs 17.35bn	Rs 17.2bn
Penalties fines and forfeiture	Rs 0.68bn	Rs 0.68bn
Voluntary transfers other than grants	Rs 0.002bn	Rs 0.001bn
Others	Rs 17.1bn	Rs 16bn
		Source: FCGO

Revenue collection based on the annual target is given high priority in the revenue administration since the target based incentive system was implemented in 2008 when Baburam Bhattarai was the finance minister. It is reported that the government missed the revenue collection target in the fiscal 2017-18 for the first time in the last decade.

The government missed the revenue target in the previous fiscal year as the collection under the major tax heading was weak. A wide gap of Rs 9.82 billion was witnessed in the target and realisation of Value Added Tax. The government had set a target of collecting Rs 216.62 billion under VAT, but the realisation stood at Rs 206.8 billion.

Meanwhile, the government was able to collect Rs 128.06 billion from customs duties against the target of Rs 126.8 billion, according to FCGO.

The government also missed the revenue collection target under income tax — the second largest contributor to the tax revenue. The government collected income tax worth Rs 179.1 billion against the target of Rs 186.22 billion.

Though the government missed the revenue collection target under a few tax headings, the collection under non-tax heading was encouraging.

The government collected Rs 67.17 billion under non-tax heading against the target of Rs 63.84 billion.

Source:  The Himalayan Times