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VAT in excess, income tax short
KATHMANDU, JUN 05 -
The government has been able to collect value added tax (VAT) more than the target but it has failed to meet the mark set for income tax until mid-May of the current fiscal year.
This scenario contrasts the earlier trend of not meeting the VAT target while meeting that of the income tax in the last few years.
Overall VAT collection until Mid-May was Rs. 42.85 billion against the target of Rs. 40.96 billion which is an increase of 4.6 percent against the target.
The government aims to collect Rs. 51.56 billion in VAT this year. “At this rate, we hope we will be able to collect more than Rs. 53 billion,” said Shanta Raj Subedi, joint secretary at the Finance Ministry. The government had failed to meet the VAT target last year as it had been the case in the preceding few years.
Internal value added tax has also overshot target after a gap of few years. The internal VAT collection rose 10 percent to Rs. 15.16 billion against the target of Rs. 13.81 billion. The government has plans to collect Rs. 17 billion as internal VAT.
The VAT collected at customs points is at par with the target but the overshooting of target in the internal front contributed to surpass overall VAT collection. The internal VAT includes tax imposed on value addition within the country and not the VAT collected at the customs offices.
Deputy Director General of Inland Revenue Department Laxman Aryal said the increase in the internal VAT was due to expanded tax base, easier and faster service, tax education and action against tax evaders in the recent times.
The government has declared the current fiscal a tax compliance year and aims to add 200,000 new taxpayers. The number of new taxpayers reached 120,000 until mid-May with the number of total taxpayers arriving at 475,000.
Despite addition to the taxpayers’ number, income tax was collected only up to 96.57 percent of the target. The collection remained at Rs. 24.73 billion against the target of Rs. 25.75 billion.
The government aims to collect Rs. 36.29 billion in the current fiscal year. “We hope we will meet the target as many taxpayers pay outstanding taxes of previous quarters before the closure of the fiscal year,” said Subedi.
Posted on: 2010-06-06 07:18
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