Tax collection below 80% in all bands

Kathmandu, Aug. 1

The government couldn't meet any of the revenue targets, except in education service fee, it set for the last Fiscal Year 2023/24.

Through the budget of last year, then Finance Minister Dr. Prakash Sharan Mahat had set the revenue target at Rs. 1422.54 billion but only Rs. 1082.74 billion (74.4 per cent of the annual estimate) could be collected.

According to the statistics of the Ministry of Finance (MoF), none of the tax components crossed 80 per cent of the annual target. However, the non-tax revenue was collected 97.6 per cent of the annual estimate. The government collected Rs. 114.24 billion non-tax revenue last year against the target of Rs. 117.06 billion.

The Value Added Tax (VAT) contributed highly to the state coffers with Rs. 310.45 billion mobilisation which is 72.9 per cent of the target. Among the taxes, collection of income tax remained the highest with 78.3 per cent collection of the Rs. 362.11 billion target.

With the decreased international trade, the customs duty registered the poorest performance with just 65.4 per cent of the target. The government had set the target of Rs. 307.43 billion customs duty for the last FY but only 201 billion could be collected.

 

Annual revenue target and actual collection

Revenue Type	Annual Target (Rs.)	Achievement (Rs.)	Per cent
Total revenue	1422.54 bn	1082.74 bn	76.1
Customs duty	307.43 bn	201.02 bn	65.4
VAT	425.89 bn	310.45 bn	72.9
Excise duty	207.22 bn	146.35 bn	70.6
Income Tax	362.11 bn	283.46 bn	78.3
Non-tax revenue	117.06 bn	114.24 bn	97.6

Source: Ministry of Finance (MoF)

Meanwhile, the government collected Rs. 450 million green tax which was not in the annual estimation.

Likewise, one of the best performing sectors was the 'road construction and maintenance fee' as there was collection of Rs. 4.31 billion against the target of Rs. 4.57 billion.

Meanwhile, the number of taxpayers, both individual and institutional, has gone up significantly in the past couple of years reaching 6.8 million by the end of the last Fiscal Year 2023/24.

More than 93 per cent of the total taxpayers' certificates issued are Permanent Account Numbers (PANs), according to the reports report published by the IRD, the tax administration body under the MoF.

By the end of the last FY 2023/24 (July 15), the IRD issued above 6.34 million PAN cards, of which 617,781 were issued last year.

Personal PAN dominates the all taxpayers' number with 4.26 million obtaining the tax registration. There were 3.65 million Personal PAN holders by the end of the previous FY 2022/23. Two years ago, PPAN holders' number was only 3.05 million.

Likewise, the number of Business PAN certificates has reached 1.99 million by mid-July this year against 1.87 million in the same period last year. About 80,430 Withholding PAN have been issued so far.

Similarly, taxpayers registered with the Value Added Tax (VAT) and excise duty has reached 334,983 and 125,081 respectively.

On the year-on-year basis, there was an increase of 786,343 in PAN holders last year.

Published in The Rising Nepal daily on 2 August 2024.