The government has added 433,703 taxpayers over the first eight months of the current fiscal year 2024-25. In the same period of the previous year, the number of taxpayers had increased by 426,330.

According to the Inland Revenue Department (IRD), the total number of taxpayers reached 6,659,836 by mid-February of the current fiscal year. This represents a 6.97 percent increase in the number of PAN holders over the eight-month period. The total number of taxpayers stood at 6,226,133 in mid-February of 2024.

However, while the number of taxpayers has grown, revenue collection has not increased proportionally. This is largely because the majority of new registrations are for individual Permanent Account Numbers (PAN), which contribute less to revenue compared to business entities.

According to the IRD, individual taxpayers account for 69.3 percent, or 4,612,406, of the total taxpayers. Business PAN holders account for 30.2 percent, or 2,012,586, of the total taxpayers. The remaining 34,844 PANs, or 0.5 percent of the total taxpayers, have been issued to tax-exempt entities.

Total revenue collection has reached Rs 739bn as of March 24. According to the Financial Comptroller General’s Office (FCGO), tax revenue accounts for about 80 percent of the total revenue. The government has mobilized Rs 656.39bn in tax revenue, Rs 82.83bn in non-tax revenue, and Rs 9.20bn in grants as of March 24.

With less than four months remaining in the current fiscal year, the government has reached the halfway point in revenue mobilization. Total revenue mobilization stands at 52.08 percent of the
Rs 1,419.30bn target for the current fiscal year. Progress in tax and non-tax revenue collection stands at 51.11 percent and 61.32 percent, respectively.

Nepal’s revenue-to-GDP ratio, which was 9 percent in 1989-90, increased to 21.6 percent in 2021-22, only to decline to 17.8 percent in 2022-23. Similarly, the tax revenue-to-GDP ratio, which was seven percent in 1989-90, improved to 20 percent by 2021/22 but dropped to 16.1 percent in 2022-23, marking a 4 percent decline.