Income tax revenue up by 21 per cent

Income tax revenue increased by 21.4 per cent to reach Rs 19.1 billion in the fiscal year 2007-08 compared to an increase of 42.7 per cent in the previous fiscal year. A significant amount of income tax paid by large taxpayer companies like Nepal Telecom (NT), Surya Nepal, Spice Nepal, Gorkha Brewery, Standard Chartered Bank Nepal Ltd contributed to such a growth of income tax collection in the review year, said a report by Nepal Rastra Bank. In 2007-08, VAT made up 29 per cent followed by customs duties at 18.4, income tax at 17.8 and excise duty at 10.4 per cent. In the previous year, such ratios were 29.8, 19, 17.9 and 10.7 per cent, respectively. Revenue mobilisation also increased by 22.6 per cent to reach Rs 107.6 billion in the fiscal year 2007-08. Revenue had risen by 21.3 per cent to reach Rs 87.7 billion in 2006-07, the central bank report said. Consequently, revenue to GDP ratio climbed to 13.1 per cent from 12.1 per cent the last fiscal year. Such an impressive growth of revenue was on account of substantial increase in import of merchandise goods and resulting increase in customs duties, VAT revenue, excise duty and increase in income tax as well as non-tax revenue. Of the total revenue mobilisation, VAT revenue grew by 19.2 per cent to Rs 31.2 billion in 2007-08. The growth in VAT revenue was on account of growing imports and consumption induced by the rise in remittances and reforms in VAT administration in the form of establishment of Large Taxpayers Unit, strengthening of the billing system and non-filers' management. In 2007-08, customs revenue rose by 18.6 per cent to Rs 19.8 billion compared to an increase of nine per cent the previous year. Reforms in customs administration, increase in imports of high tax yielding vehicles and spare parts as well as rise in the amount of Indian excise refund contributed to such a high growth of customs revenue. Excise revenue increased by 20 per cent to Rs 11.2 billion compared to an increase of 43 per cent the last fiscal year year. Reforms in excise administration, identification of new excisable goods and increase in imports of high tax yielding vehicles and spare parts accounted for increase in excise revenue, said the NRB report. Non-tax revenue grew by 29 per cent to Rs 21.3 billion compared to an increase of 17.2 per cent the last fiscal year. Such increase in non-tax revenue was on account of increase in dividends paid by public enterprises including NRB as well as the amount received by the government in the form of principal repayment from NT, Nepal Electricity Authority and Civil Aviation Authority.
Source: THT