January 17: The government has not been able to increase the capital expenditure in the current Fiscal Year (FY 2078/79).
According to the Financial Comptroller General’s Office, the government has not been able to collect half of the revenue target of Rs 1.18 trillion set for the current fiscal year.
By mid-January, the government had collected only 45.91 percent of the revenue target, or Rs 591 billion. The share of tax revenue is Rs 494.01 billion, and the share of non-tax revenue is Rs 48.06 billion.
According to the preliminary data of the Inland Revenue Department, only 93 percent of the target has been collected in the first six months of the current fiscal year. Out of the target of collecting Rs 241.71 billion in taxes during this period, only Rs 225.47 billion has been collected.
The government had set a target of collecting Rs 241.71 billion in internal revenue by mid-January. The value added tax (VAT) collected during this period is equivalent to Rs 53.52 billion. This amount is equal to 87 percent of the target set for VAT collection till mid-December.
The department has stated that Rs. 74.71 billion has been raised from excise duty so far and this collection is 100 percent of the half-yearly target of excise duty.
Similarly, the department has collected Rs 2.97 billion under health care tax which is 203 percent of the current target and the education service tax collected so far is Rs 282 million or 56 percent of the target.
Although budget expenditure under different headings including capital expenditure has a role to play in revenue collection, it does not seem to have been spent accordingly. According to the Financial Comptroller General’s Office, the government spending has been weak during the review period. By mid-December, only 31 percent of the annual target had been met, according to the FCGO.
Out of the annual budget allocation of Rs. 1632.82 billion for the current fiscal year, Rs 506.69 billion has been spent so far. Out of this, 38.15 percent or Rs. 406.41 billion includes current expenditure, 13.44 percent or Rs 50.80 billion is capital expenditure and 26.12 percent or Rs 49.47 billion was spent for financial management.
The government has stepped up its ban on businesses, citing a surge of the new variant of Covid-19. This will also have an impact on revenue collection as well as expenditure and will further challenge the government to meet the target in the coming days.