Revenue collection still remains dismal
The government’s ongoing struggle with revenue collection, which persisted throughout the previous fiscal year, appears to persist into the current fiscal year as well. The initial two months of FY 2023/24 have not shown any significant enhancement in the government’s revenue collection. According to recent data from the Financial Comptroller General Office (FCGO), the government has managed to achieve just 9.92 percent of its total revenue goal during this period.
In fact, the current fiscal year has witnessed a weaker performance in revenue collection compared to the previous fiscal year. In the first two months of FY 2023/24, government revenue collection amounted to Rs 141.07bn, slightly lower than the Rs 143.81bn achieved during the same period in FY 2022/23.
The Department of Customs (DoC) and the Inland Revenue Department (IRD) are the two major revenue collectors of the federal government. The statistics show, both agencies continuously collect revenue below the targets in this fiscal also.
The IRD has collected only 78.75 percent of the target in the first two months of this fiscal. The department has been able to collect only Rs 66.19bn against the target of Rs 84.05bn. In fact, the IRD’s revenue collection in the first two months of FY 2023/24 is 2.54 percent less than that of FY 2022/23’s first two months.
While the Custom Department has seen some improvement, its revenue collection is also below the target. The department has managed to collect 75.5 percent of the target in the first two months of this fiscal. The DoC has collected Rs 67.95bn in revenue in the first two months against the target of Rs 90.28bn.
Finance Ministry officials attribute the subdued economic activities to the slowdown in revenue collection. Despite the Dashain festival nearing, traders say there is not much movement in the market. The ministry had called a meeting of the heads of departments and discussed the decline in revenue.
The ministry has also formed a task force to study the problem of revenue leakage. The meeting of the Central Revenue Leakage Control Committee last Friday formed a working group under the coordination of the Revenue Secretary to analyze the trend of revenue leakage and submit an action plan with concrete measures to control it within a week.
Marginal growth in capital expenditure
There has been some improvement in the capital expenditure in the current fiscal year. The government has spent Rs 8.163bn under the capital expenditure heading in the first two months compared to Rs 5.86bn during the same period in the last fiscal.
According to the officials of the Finance Ministry, the surge in the capital expenditure in this fiscal was due to the government releasing dues of the last fiscal year that were accrued to the contractors. The government has allocated Rs 302.07bn under the capital expenditure for FY 2023/24.
The government spent Rs 87.66bn under recurrent expenditure in the first two months of the current fiscal year, which was less than Rs 21.06bn compared to the review period of the last fiscal year.
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