Revenue growth rate falls
The revenue growth rate slowed down in last fiscal as the pace of tax collection slowed during the year due to low economic activities and Constituent Assembly election.
The government mobilised Rs 356.85 billion revenue in last fiscal year, up by 20.6 per cent a fiscal year ago, revealed the central bank data. "The revenue mobilisation had grown by 21.2 per cent to Rs 296.01 billion in a fiscal year ago in 2012-13," it revealed, adding that the revenue mobilisation has however, exceeded the government target.
Consequently, the revenue to GDP ratio by one per cent in a fiscal year and touched 18.5 per cent in the last fiscal year – compared to that of 17.5 per cent in the fiscal year 2012-13 – due to an increase in imports and resulting rise in custom revenue, increase in value added tax and income tax, tax leakage control as well as overall revenue administration reforms, according to the government.
The largest contributor to the revenue, as always, was value added tax (VAT) followed by income tax. The government mobilised Rs 100.97 billion in VAT, which is some 28.3 per cent of the total revenue mobilisation, it said, adding that VAT mobilisation in the last fiscal was 20.9 per cent higher than a fiscal year ago.
The government has attributed the higher mobilisation to its initiatives to increase the tax compliance.
Likewise, the second largest contributor income tax recorded Rs 77.93 billion in the last fiscal 2013-14. "It is some 21.8 per cent of the total revenue mobilisation," the data revealed, adding that the income tax mobilisation stood some 16.3 per cent higher than a fical year ago, when income tax mobilisation had recorded Rs 67.02.
The government mobilised Rs 67.88 billion – the third largest contributor – in customs duties. It is some 19 per cent of the total revenue. In fiscal 2012-13, government had mobilised Rs 56.89 billion in customs duties.
The growth rate of customs duties decreased remarkably in the last fiscal as the country continued to reduce customs duties on various goods according to the government's commitment in global and regional trade pacts like World Trade Organisation (WTO) and South Asian Free Trade Agreement (SAFTA).
The growth rate of non-tax revenue mobilisation surged by 23.8 per cent to Rs 45.04 billion against Rs 36.40 billion a fiscal year ago.
The excise revenue surged by 23.8 per cent to Rs 45.40 billion – compared to an increase of 20.6 per cent to Rs 36.66 billion a fiscal year ago in 2012-13 – in the last fiscal year. The Increase in imports of higher excise tax yielding goods as well as growth in excise revenue from domestic production mainly contributed to the growth of excise revenue.
Likewise, income from other tax sources, like road maintenance and improvement duty, road construction and maintenance duty, looked up by 38.6 per cent to Rs 6.85 billion, the report said, adding that of the total revenue, the share of tax revenue and non-tax revenue stood at 87.4 per cent
and 12.6 per cent, respectively in the last fiscal year compared to 87.7 per cent and 12.3 per cent, respectively a fiscal year ago in 2012-13. The share of direct tax and indirect tax revenue in total tax revenue remained at 31 per cent and 69 per cent, against 31.7 per cent and 68.3 per cent, respectively in 2012-13.