The government is on track to miss its revenue targets yet again as collection has reached just 50.24 percent with just four months remaining in the fiscal year 2024-25.
According to the Financial Comptroller General Office (FCGO), revenue collection stood at barely half the annual target as of March 11, with the current fiscal year set to conclude in mid-July.
Tax revenue collection has reached 49.19 percent of the target, while non-tax revenue performance is comparatively better at 60.27 percent. However, the government’s performance in securing grants has been particularly poor, with only 17.43 percent of the targeted amount realized by March 11.
The government set an ambitious revenue target of Rs 1,419.30bn for the current fiscal year—a 34 percent increase over the Rs 1,039bn collected in 2023-24. So far, it has raised Rs 713.08bn.
The sluggish revenue mobilization is due to lower-than-expected tax collections and a shortfall in foreign grants. The government aims to collect Rs 1,284.20bn in tax revenue,
Rs 125.09bn in non-tax revenue and Rs 52.32bn in grants in the current fiscal year. However, it has so far collected only Rs 631.65bn in tax revenue, Rs 81.42bn in non-tax revenue and Rs 9.11bn in grants.
Despite gradual improvements in the economy—such as a nearly 10 percent increase in imports compared to the last year and growth in domestic production—revenue collection has not kept pace. Officials suspect that widespread revenue evasion is a key factor behind this shortfall.
Recognizing the shortfall, the Ministry of Finance has revised the revenue target downward to Rs 1,286bn through the mid-term review of the budget. However, achieving even this revised target is becoming challenging for the government. The government must collect nearly Rs 550bn in the remaining four months to meet the revised target. With average monthly revenue collection currently at just Rs 90bn, meeting the target will be difficult, even though revenue collection typically surges in the final month of the fiscal year (mid-June to mid-July).
This is not the first time the government has struggled to meet its revenue goals. In the previous fiscal (2023-24), it fell short by Rs 379bn, collecting only 74.29 percent of the
Rs 1,093bn target. Revenue mobilization was even worse in 2022-23, when the government collected just 68.23 percent of the Rs 1,403bn target—the poorest performance in the past five years. In contrast, the government achieved 90.24 percent of the Rs 1,180bn target in 2021-22 and 92.5 percent of the Rs 1,011bn target in 2020/21—the highest collection rates in recent years.
