By the end of Baishakh (mid-April to mid March) -- the 10th month of the current fiscal year -- the finance ministry collected a total of Rs 110.51 billion revenue, surpassing its target of Rs 103.5 billion for the month.During the corresponding period last fiscal year, it was able to collect Rs 79 billion. "Revenue collection exceeded 40 per cent in comparison to last fiscal's same period," according to the finance ministry. At the end of the ninth month, revenue collection exceeded its own target collecting 39.3 per cent higher to Rs 98.67 billion as against Rs 70.85 billion last Chaitra.
The encouraging collection of revenue is attributed to three major reasons: priority of the finance ministry to revenue mobilisation, fear in the business community of the Maoist leadership and the alacrity of the leadership itself.
"The seriousness of leadership -- both political and bureaucratic, reduction in malpractices and discrepancies and the good relationship between the government and private sector helped us achieve target," said acting revenue secretary Krishna Hari Baskota.Finance Minister Dr Bhattarai presented his first budget of Rs 236.15 billion for the fiscal year 2008-09 on September 19 last year. The revenue target that he had set for this fiscal year was Rs 147.72 billion, and which was dubbed highly ambitious.
Dr Bhattarai when was criticised that his target was too ambitious but he took it as a challenge and concentrated on revenue collection. The bureaucracy -- blamed for being over-politicised and lackadaisical -- also supported him whole-heartedly.Willingly or unwillingly, the business community also cooperated with the government. Though Dr Bhattarai does not agree that the government and private sector had any crisis of confidence, there was definitely a certain level of uneasiness between the business community and the government. But like good citizens, the private sector obeyed the government and came under VDIS, helping the government to increase revenue collection and exceed the revenue target.
The issue of revenue mobilisation has been a serious concern for past governments as well. Realising the importance of revenue mobilisation, the government after second Jan Andolan appointed a separate revenue secretary in 2006 August. "In the immediate past year, revenue growth was only three per cent and nine per cent a year ago," finance secretary Rameshwor Khanal, who was the first incumbent in the post, said adding that the government then was serious about revenue mobilisation and that is why it thought of appointing a separate full-time secretary for revenue.
"Successive finance ministers gave top priority to revenue collection," Baskota said adding that reduction of corruption in customs, a stronger bureaucracy and changed tax system worked miracles in achieving record revenue generation.Dr Bhattarai, as he himself claims, has a reason to be satisfied as he was successful in bringing more people within the tax net through VDIS. "Of the 3600 who came under VDIS, 60 per cent are new entrants," Baskota said. "The older 40 per cent ones also expanded their base."
"The finance ministry went the extra mile and worked hard for forming a separate desk for separate types of taxes like excise desk, income tax desk and customs desk," he said adding that the systematisation of tax and regular follow-up not only helped revenue collection for this government but would also have long-term benefits for successive governments.
Though, the contribution of non-tax revenue to the total revenue is 70 to 75 per cent, Value Added Tax (VAT) target could not be achieved in comparison to income tax and excise.However, the government failed in spending on development activities as finance ministry's task is not only to collect revenue. Dr Bhattarai accepted the failure in development spending but he also blamed the other political parties for not being able to spend the development budget. The cold behaviour of the coalition partners took its toll on development spendings. "In absence of local government, the budget could not be spent on development activities," he said adding that the other ministries also did not whole-heartedly support the finance ministry.
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