KATHMANDU, Dec 16: The government missed its revenue collection target in the first five months of the current fiscal year, mainly due to the adverse economic impacts in the aftermath of the Gen Z movement and violence.
As per the records with the Ministry of Finance (MoF), the government had set the revenue target of Rs 520.44 billion during mid-July and mid-December this year. But the actual realization was Rs 409.78 billion, a 78.74 percent of the targeted amount.
According to the MoF, revenue collection was affected mainly due to the slowdown in economic activity following the impacts of the Gen Z movement. Due to the issue of security lapses during the September 8 and 9 protests, the economic activities were largely affected inside the country.
Diversifying Government Revenue
The records of the MoF show that the government fell short of collecting income tax by Rs 25 billion due to the unrest. Of the targeted income tax collection of Rs 86 billion, only Rs 61 billion was realized.
The revenue collection during the review period stood at 27.45 percent of the total projected amount of Rs 1.480 trillion for the entire fiscal year.
Last month alone, the government achieved 84.31 percent progress in revenue collection target. During mid-November and mid-December, the government had set a goal to collect revenue of Rs 95.20 billion, while the actual realization stood at Rs 80.27 billion.
The lacklustre capital expenditure of the government is also one of the reasons for the failure to meet the revenue collection target. “Had the capital expenditure been increased, it would have boosted economic activities and revenue collection,” said an official at the MoF.
As per the records with the Financial Comptroller General Office (FCGO), the government has spent only eight percent of the capital expenditure as of Monday. The amount spent on development projects so far is only Rs 33.87 billion against the allocated amount of Rs 407.88 for the current FY.
Meanwhile, the import-based revenue of the government increased in the review period. As imports increased by around 18 percent, customs duties, excise duties, and VAT collected at customs points also increased. However, revenue collection under the headings of non-tax and income tax were not as per the expectations.
