The government has set a target of mobilizing revenue of Rs 247.7 billion this financial year mainly by slapping various forms of taxes and excise duties - up 23.5 percent from last fiscal year´s actual revenue collection of Rs 200 billion. [break]Of this amount, Rs 190 billion was collected till the end of first 10 months of the current fiscal year, which is Rs 2 billion short of target set for 10-month period.
A large portion of the government revenue comes from collection of value added tax (VAT). In this fiscal year, the government plans to raise Rs 72.74 billion through VAT collection, which is almost 30 percent of the revenue collection target.
“This year VAT collection has gone up by 34 percent which means income tax collection has also gone up as well, as increment or fall in VAT and income tax collection usually go hand in hand,” Finance Ministry Spokesperson Rajan Khanal said.
Despite significant hike in mobilization of VAT, the finance ministry fears frequent bandhas called by various groups may hit its revenue collection target, as each day of bandh prevents the government from collecting billions of rupees in taxes.
“It´s a big challenge to meet the target by the end of the financial year in this environment,” the minister told the media. “But various measures will be put into effect to meet the objective.”
One of the measures that the finance ministry plans to resort to is directing all state-owned enterprises to clear financial arrears ahead of time.
“For this, the finance minister will soon summon all director generals of various government departments and instruct them to act immediately on it,” Khanal said. “During the meetings, the finance minister may also ask all public enterprises to settle non-tax revenue in time so that the revenue collection target can be met.”
The government has set a target of mobilizing Rs 32.57 billion through non-tax revenue this fiscal year, which is collected mainly by slapping service fees, fines, judicial fees and registration fees on various firms.
Related story
Raising Internal Debt to Meet Revenue Target can be Counterprod...
