Published On: January 26, 2020 12:26 PM NPT By: Republica | @RepublicaNepal
KATHMANDU, Jan 26: The government has stepped up to form a revenue board that is envisioned to help solve various issues related to the country's existing tax system.
Talking to Republica, Uttar Kumar Khatri, spokesperson of the Ministry of Finance, said that the Cabinet has already approved forming the board and has issued the formation order in this regard. According to him, the permanent and autonomous structure will consist of three members including a representative from the private sector. “However, the final structure is yet to be finalized,” said Khatri.
According to him, the board will replace the existing revenue advisory committee that the government forms every year during budget preparation to address the issues of taxation in the line of the government's fiscal plan. The committee that is led by the joint secretary of the Ministry of Finance, consists of tax experts from various sectors along with the representatives from the private sectors, and will advise the government with suitable revenue policy and programs in the annual budget and the Financial Act.
Almost every now and then, the private sectors have been pointing out the flaws in the government's tax system, which according to them has led to a fall in revenue collection and slow business growth. Rajesh Kaji Shrestha, president of the Nepal Chamber of Commerce, said that traders are now suffering from the burden of excess taxes imposed by the local government.
Shrestha termed the prevailing reference price at customs points as 'impractical.' “The provision has fueled up grey market, thereby hitting the government's revenue collection,” he said.
The budget for 2019/20 also talks on forming a separate board regarding the government revenue collection. “Revenue Board will be established as a permanent mechanism for conducting revenue related studies/research, for performing tasks of the existing Revenue Consultative Committee, and for providing policy recommendation and operational suggestions to the government,” reads the budget.
At the time the government is struggling to meet its revenue target, the government has speeded up forming the revenue board. The statistics of the Financial Comptroller General Office (FCGO) shows that the government collected only Rs 433.15 billion during mid-July to mid-January, against the target of mobilizing Rs 537 billion.
Although the government attributed the restriction in import behind the shortfall in revenue collection, the government seems to be stressed out for managing the financial resources for the development works. The ministry officials however said that the revenue collection from the internal sources has increased by 25% in contrast to a growth of 20% of previous years due to the government's new policy.
Speaking at a program on Friday, Finance Ministry Yubaraj Khatiwada too had emphasized the need of formation of the board. “The board will investigate and analyze the effectiveness of the existing tax system, identify the new taxable areas and will help solve underlying problem in the collection of tax revenue,” Khatiwada had said.
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