February 23: The government has revised its target of revenue collection during the mid-term review of current fiscal year’s budget. The government has adopted strict measures to curb revenue leakage after realizing that it is unlikely to meet the revised target as well.
The government has a daunting task of collecting Rs 600 billion in the next five months as per the revised target.
Finance Minister Yuba Raj Khatiwada has instructed all departments under his ministry to adopt strict measures to meet the revised target. He also called a meeting of high-ranking officials from ministries of finance, home affairs and Prime Minister’s Office during Democracy Day last week and gave strict orders to meet the target.
The finance minister presented himself in an aggressive manner, according to officials who attended the first meeting after the mid-term review. During the meeting, Khatiwada reportedly issued stern instructions to the government authorities to collect all the dues and control tax evasion.
The finance minister also instructed the authorities to increase patrolling to curb smuggling and make proper arrangement of logistics and manpower for such patrol teams. He also directed them to keep vigilance at sensitive border entry points in order to intercept illegal entry of goods.
The government had set a target to collect revenue of Rs 1112 billion for the current fiscal year 2019/20. However, in the mid-term review, the government revised the target and set a new goal of collecting Rs 1056 billion. In the first six months of the current fiscal year, the government was able to collect only Rs 456 billion revenue. Now it faces an uphill battle to collect Rs 600 billion in the remaining five months.
The government has claimed that the decline in revenue collection is a result of a drop in import in the current fiscal year. If the government is to meet its revised target, it has to collect Rs 1004 billion from customs offices alone.
“The obstruction in export of palm oil has been removed. This has opened way for import of unprocessed palm oil. So, we are hopeful of meeting the revised target,” said a highly-placed customs official requesting anonymity.
The government intends to collect Rs 169 billion from Value Added Tax (VAT) in the next five months. The government has already collected Rs 126 billion so far this year from VAT.