Budget gives boost to revenue mobilisation

Four-month delay in full-fledged budget has hit the national coffer hard, though after the full fledged budget the revenue mobilisation has registered an encouraging growth.
“In the first five months, the revenue mobilisation has registered a shortfall -- of Rs 6 billion -- in the target, due to delay in the full-fledged budget,” according to the finance ministry that has however, claimed that the revenue mobilisation after the budget has posted an increasing trend. Finance minister Surendra Pandey of the care taker government of Madhav Kumar Nepal has presenting Rs 337.9 billion budget for the current fiscal year through ordinance after a long tug of war with the opposition UCPN-Maoist.
The feel-good budget that focused on eduction, health and social service apart from export promotion, infrastructure, and agriculture had targetted a growth of 4.5 per cent and inflation at seven per cent for the fiscal year 2010-11.
The full-fledged budget was announced on November 20 — four months later than the regular schedule — due to political deadlock. The Rs 337.90 billion budget has aimed at collecting Rs 216.64 billion in revenue in the current fiscal year.
However, the government has collected Rs 65.10 billion — a growth of 11.1 per cent — in the first five months of the current fiscal year compared to the same period last fiscal year, when the collection stood at Rs 58.60 billion.
“The sixth month will be crucial as we are expecting to collect Rs 24.56 billion in a month,” said Revenue Secretary Krishnahari Baskota, who is hopeful of the positive impact of the budget.
The sector-wise revenue collection trend reveals that the revenue is import based as the Value Added Tax (VAT) contributes the largest chunk to the government coffer.
By the first five months, VAT contributes Rs 26.16 billion, followed by customs at Rs 14.2 billion, excise duty Rs 10.85 billion, income tax Rs 8.51 billion, non-tax sector Rs 2.84 billion, vehicle registration Rs 1.40 billion and registration fees contributes Rs 1.40 billion to the government coffer, according to the finance ministry.