KATHMANDU, April 14: With just three months left for the current fiscal year to end, the government has been able to meet only 53.46 percent of its annual revenue target, following a slump in economic activities amid the ongoing threat of COVID-19.
According to the Financial Comptroller General Office (FCGO), the government as of Sunday, the last day of the Nepali Year 2076, has been able to collect only Rs 590.63 billion in taxes against the target of Rs 1.11 trillion. The total tax revenue collected so far stands at 53.46% against the target of over Rs 1 trillion. It means if the government is to meet the target, it will need to collect taxes worth Rs 470 billion in the next three months.
During mid-March to mid-April, the month in which most of the economic activities came to a halt after both Nepal and India enforced nationwide lockdowns, the government was able to collect taxes worth only Rs 42 billion.
According to a source, there was slow progress mainly in the collection of excise duty, customs duty and income tax. Following the pressure on revenue collection, the ministry has even written to the Inland Revenue Department to tighten the noose on revenue collection. The ministry has sought to implement strict policies to check the leakage of excise duty.
Likewise, the ministry has also directed the department to facilitate implementation of 10percent VATrefund on electronic payment in order to ensure more revenue from VAT. The government has made this system online for the past few months. With the budget announcement for fiscal year 2019/20, the government adopted a policy to switch to internal sources for major tax collections.
Apart from revenue collection, the government has also faced a setback in its capital expenditure capacity amid the threat of the pandemic, according to the FCGO statistics. Currently, almost all big projects are hit either by the unavailability of construction materials or the shortage of workers, according to government agencies.
By the third quarter-end, the government was able to spend only around 26 percent of the budget allocated for development activities. For this fiscal year, the government has earmarked Rs 408 billion as capital expenditure. Last month, an additional Rs 8.74 billion was spent in the development projects, according to the records maintained by the FCGO.