Monday, December 31, 2012

Revenue mobilisation growth rate slows

Lack of budget has started taking its toll in revenue mobilisation as the fifth monthly target fall short by around five per cent.
“The revenue mobilisation could meet only 95.91 per cent of the monthly target for the fifth month’s (mid-November to mid-December) target, as the government has been able to mobilise Rs 97.33 billion till five months of the current fiscal year — that is 25.27 per cent more than the same period of the last fiscal year — due to low investment in productive sectors and lack of new employment," according to the Finance Ministry. “However, the revenue mobilisation has been 101.55 per cent for the period of five months of the current fiscal year.”
Though, overall revenue mobilisation trend is positive, ineffective revenue leakage control mechanism, low consumption of cigarette and tobacco due to anti-tobacco campaign coupled with contraction in economy has slowed down the revenue mobilisation, said caretaker finance minister Barsha Man Pun during the Revenue Review Meeting today.
Pun, on the occasion, directed tax administration to analyse contribution of revenue in the Gross Domestic Product (GDP) and identify gap to prepare effective plan to cover the gap.
In the fifth month of current fiscal year by mid-December, the government mobilised Rs 6.88 billion under Value Added Tax (VAT) against Rs 6.19 billion in the same month of last fiscal year, the ministry said, adding that it has been able to moboilise Rs 5.03 billion under customs duty against Rs 3.47 billion in the same month of last fiscal year.
Likewise, mobilisation of excise, income tax and registration fee stood at Rs 3.03 billion, Rs 2.39 billion and 755.2 million, respectively by mid-december, according to finance secretary Shanta Raj Subedi.
Similarly, Subedi asked the Inland Revenue Department to improve performance. He also directed the department to develop action plan to meet revenue target.
"The ministry should review customs valuation and tighten Post Clearance Audit (PCA) to control revenue leakages, Subedi said, directing the Department of Revenue Investigation to accelerate its patrolling in possible leakages points more effectively.
In the meeting, chief economic advisor to the ministry Shree Ram Paudel asked the ministry to identify informal sectors and bring them into tax net.
Similarly, the meeting also decided to review excise rate and control revenue leakages and smuggling from customs points to accelerate revenue mobilisation rate.
Sectorwise contribution
Value Added Tax – 34 per cent
Customs duty – 24 per cent
Excise – 15 per cent
Income – 14 per cent
Non tax sector – 9 per cent
Others – 4 per cent
(Source: Finance Ministry)

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