KATHMANDU, April 24: Minister for Finance Yuba Raj Khatiwada has said that the government would not prefer uncontrolled imports just to meet its revenue targets.
Speaking at a pre-budget interaction organized by Management Association of Nepal (MAN) in Kathmandu on Tuesday, Khatiwada said that the government was not in favor of allowing unfettered import to boost its revenue.
The statement of the finance minister has come at a time when the government is struggling to meet its revenue target set for the current fiscal year. In the first three quarters of FY2018/19, the government has achieved only 62.64 percent revenue target. Against the target of collecting a total of Rs 831.32 billion in the current fiscal year to finance its expenditures, the government has managed to collect only Rs 520.73 billion as of April 22, according to Financial Comptroller General Office (FCGO).
However, the statement of the finance minister indicates that the government was less concerned with the slowdown in the revenue collection which is partly attributed to restriction in imports of luxury goods.
“When we impose a control on the import of some luxury goods due to rising trade deficit, there will be some pressure on revenue. However, we are not going to continuously harp on meeting the revenue target which used to be case in the past,” said Finance Minister Khatiwada.
“We used to be target-centered earlier. Of course, the collection should be higher than the target. But, this finance minister does not have a target to collect revenue by allowing import of anything possible,” he said, adding that the government will restrict unlimited import of some luxury goods.
According to Khatiwada, import substitution of some goods was the government’s immediate strategy while high growth wasn’t possible without export promotion.
“The target should be met not by substantially increasing trade deficit, but by promoting fair trade and increasing compliance and expanding tax net,” he added.
Against the backdrop of the preparation of new budget for the upcoming fiscal year, Finance Minister Khatiwada said that shortage of resources has been a major challenge for the country.
“From the limited resources, we have to make prioritization and make budget to address the public aspirations,” he added.
According to Khatiwada, the government is currently working on the draft of Policy and Program of the current government to be tabled in federal parliament before the budget speech. The budget speech of the Finance
Minister is followed by the Policy and Program of the government presented by the President. The Ministry of Finance is currently holding discussions and consultations with various stakeholders for their suggestions for the budget of FY2019/20. This will be the second budget of the current government led by the Nepal Communist Party.