January 27, 2020 12:12 PM NPT
KATHMANDU, Jan 27: Minister for Finance Yuba Raj Khatiwada on Sunday claimed that revenue collection from internal sources has improved, downplaying concerns about the government coming under pressure to meet the revenue target due to slump in customs revenue collection.
“Although collections under excise duty, value added tax and income tax were relatively low in the past, the government has improved the tax system that has resulted in good yields from these tax headings,” said Khatiwada, speaking at a program organized to mark 68th Customs Day. According to him, this has helped to reduce dependency on customs revenue for the state fund.
The government from this year has targeted to switch to domestic economic activities from external sector to maintain its tax collection. With this, the government has adopted restriction measures on import of number of luxury items. However, the government has come under pressure to meet its revenue target mainly due to slow customs revenue collection.
The statistics of the Financial Comptroller General Office (FCGO) shows that the government collected only Rs 433.15 billion in revenue by mid-January, against the target of mobilizing Rs 537 billion. The government has set an ambitious target of a 30% growth in revenue in the current fiscal year. But, the revenue collection data shows that revenue grew by only 13% in the review period.
Khatiwada said that the government will not enforce ad hoc measures at the customs points just to meet its revenue targets. According to him, revenue collection from internal sources has increased this year to 25% compared to 20% in the previous fiscal year.
Terming the new reference customs price enforced by the government as 'impractical,' country's private sector has long been demanding that the government replace the existing system by transaction-based customs valuation. Khatiwada, however, ruled out any such possibility soon.
Finance ministry officials say that the government has been reluctant to scrap the reference price system as it has controlled under invoicing at customs points. The flaws like under valuation of imported goods have been traced even when the traders open letter of credit at the banks.
The government may rethink on the existing system if the problem of under valuation during issuance of letter of credit is solved, a finance ministry source told Republica.
Meanwhile, the Department of Customs on Sunday launched customs clearance mobile application and dashboard. The app facilitates customs clearance of traded goods electronically, while the dashboard allows the concerned authorities to receive real time information of revenue collection at the major customs points.
Suman Dahal, director general of the Department of Customs, said mobile application and dashboard were part of the government's measures to automate customs operation.