Govt bid to streamline import
With the revenue target proving difficult to achieve, the government has decided to increase the valuation of 3000 goods. The move is aimed at curbing the decline in the customs revenue collection.
The annual seminar on valuation organised by the Department of Customs (DoC) that concluded on Saturday took a decision to this effect. The meeting of the finance ministry and customs office chiefs decided to increase the valuation by 10-100 percent for local import—import of goods from India and China without opening the letter of credit (LC)—and 10-60 percent for goods to be imported from third countries allowing LC.
Among the goods seeing a rise in their valuations are garlic, betel nut, spices, biscuits, soft drinks, cosmetics, plywood, monosodium glutamate, textile, readymade garments, footwear, carpet, aluminium profile, glass, sports materials, marble, bicycles, bakery and dry foods.
Usually, the government recognises purchase bills, but whenever it feels that goods are being undervalued, it uses own valuation measures to fix the purchase rate. “The valuation will be adjusted based on the retail price in the local market, price in border areas of neighbouring countries and factory price here,” said Tanka Mani Sharma, director general of DoC. He said the adjustment was necessary as prices have increased in both international and local markets.
Although the meeting used to take place in September-October, this year, the meeting was held in April. Ministry officials expect that the adjustment in the valuation would help increase revenue.
As of mid-April, revenue collection grew by just 15.2 percent to Rs 145 billion against the target of Rs 152 billion. Revenue collection should grow by 20 percent to meet the overall revenue target of 216 billion for the current fiscal year.
Officials said achieving the revenue target from customs offices would be a challenging job due to slowed import.
Import has risen by just 1.76 percent in the first nine months of the current fiscal year against the growth of 41.3 percent in the same period last year, according to the ministry.
A senior ministry official said the revenue target from customs and registration fees are unlikely to be met due to slowed import and poor realty trading. As of the ninth month, customs failed to meet the targets of value added tax, excise duty and customs duty.
Inland Revenue Department (IRD) has also been unable to meet the targets of VAT and excise duty. Its income tax collection has surpassed the target, though, according to the ministry. As of the ninth month, VAT and excise duty collection fell short of target by Rs 720 million and Rs 530 million, respectively, according to IRD. “Delay in the budget presentation affected both VAT and excise duty collection,” said a senor IRD official. “Slow government expenditure also resulted in low VAT collection.”
Alarmed by the situation, Revenue Secretary Krishna Hari Baskota at the seminar on Friday warned customs chiefs of transfer if they fail to achieve the revenue target. Response of the Birgunj customs office Chief Labanya Dhakal was also straightforward that he could not meet the target at a time when business activities are slow. “I am ready for transfer,” he said.
Besides the revision of goods valuation, the meeting also decided to carry out administrative and management reforms in customs offices, develop physical infrastructure, prepare strategies to prevent and control smuggling, bring reforms in information technology infrastructure and work for human resources development.
The officials also discussed proposing customs duty on different goods for the next fiscal year’s budget. The meeting formed two committees each headed by deputy director generals Madhusudan Pokharel and Anandaraj Dhakal to recommend reforms in customs’ infrastructure sector and valuation, respectively. “The committees have been told to submit their reports within three days,” said director general Sharma.
Posted on: 2011-04-25 09:29
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