NOC, NEA plays foul in govt revenue collection

Failure of Nepal Oil Corporation (NOC) and Nepal Electricity Authority (NEA) to pay back their respective loans has hit the government's revenue collection target. The government had targetted to collect Rs 26.26 billion in non-tax revenues. But by the end of Jestha, the revenue collection has reached Rs 20.54 billion — over Rs 6 billion less than the target.

Similarly, revenue mobilisations through vehicle-tax and registration-fee have slowed down and they missed their respective targets by over Rs 1 billion and Rs 2 billion respectively. "The government has collected Rs 2.13 billion under vehicle-tax and Rs 4.73 billion under registration-fee by mid-June," said revenue secretary Krishna Hari Baskota. The targetted collection from vehicle-tax and registration-fee were Rs 3.50 billion and Rs 6 billion respectively.

Encouraged by the revenue collection trends, the government has revised its target upwards by Rs 13 billion to Rs 190 billion. Earlier in the budget for the fiscal year 2009-10, the government had set a revenue target of Rs 176.5 billion for the current financial year.

"We can still meet the revised target," Baskota claimed adding that the collection under customs, VAT and excise duties are encouraging. "Due to encouraging collection from customs, VAT and excise duties, we have exceeded the overall target," he added.

The government has collected Rs 31.26 billion under customs, Rs 47.84 billion under VAT, Rs 20.85 under excise and Rs 26.24 billion under income tax heads, pushing up the overall revenue collection.

"The total revenue collection has exceeded by 2.76 per cent to Rs 153.59 billion against the target of Rs 150.83 billion by the end of mid-June," said the revenue secretary. "The collection exceeded by 27 per cent compared to the samer period last fiscal."

In the same period last fiscal year, the government had collected Rs 121.23 billion.

Still, the largest contributor to the government coffer is VAT, followed by customs, implying a growing import and consumerism. According to Prof Dr Bishwambher Pyakurel, "The government is in a trap of import-based revenue, which is not a good sign for the economy. "We are already suffering from microeconmomic difficulties," he said. "We are losing our export competitiveness," Prof Dr Pyakurel added.