In the first ten months of the current fiscal year, the revenue collection is 25.41% more than the revenue collected in the same period last fiscal. Despite a massive decline in domestic economic activities amid the pandemic, the government has witnessed significant revenue collection due to the increase in merchandised imports.

According to the monthly economic bulletin released by MoF, the significant rise in imports has led to a significant increase in the collection of customs duty, value-added tax (VAT), and excise duty.

In the review period, the government has collected customs duty worth NPR 168.17 billion, exceeding its own target of NPR 160.48 billion.

Likewise, the VAT collection from internal sectors stood at NPR 361.32 billion, an increase of 20.5% from the last fiscal. The MoF attributed the increase in tax collection to the government’s recent introduction of an online payment system for tax liabilities.

However, the non-tax revenue collection dropped by 6.49% to NPR 51.38 billion in the review period.

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The Government of Nepal exceeded its revenue collection target of the 2016-17 fiscal, supported by an exponential rise in imports and the tax paid by a telecom service provider, NCell, on its capital gains.

Exceeding its actual target of Rs 565.69 billion, the government bagged an additional sum of Rs 45.87 billion and collected Rs 611.76 billion in total, thus recording a 26.93 percent year-on-year rise.

The additional revenue is attributed to the income tax and customs tariff collections, which surpassed targets because of the tax payment by NCell and substantial rise in imports.

According to the Customs department, imports into the country in the 2016-17 fiscal surged by 31 percent over the previous fiscal.

The registration tax collections also witnessed a rise due to increase in land and housing transactions in the country.

Other than the Value Added Tax (VAT) and health & education service tax, all the other tax sections exceeded their fiscal targets.

However, VAT is the major tax earner that accounted for 26.33 percent of the overall revenue share, followed by income tax (24.74 percent), customs tariff (18.34 percent), and excise (12.18 percent).

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