IRD misses revenue target in first 2 mthsThe Inland Revenue Department (IRD) has missed the revenue collection target for the first two months of the current fiscal year due to a slowdown in income tax collection in particular.
The Inland Revenue Department (IRD) has missed the revenue collection target for the first two months of the current fiscal year due to a slowdown in income tax collection in particular. According to the department, it fell short by 4 percent by receiving Rs35.27 billion against the target of Rs36.67 billion.
The department collected Rs14.23 billion in income tax, which is 92 percent of the target of Rs15.46 billion. Corporate profit tax, remuneration tax and investment tax are the major sub-headings of income tax that the department collects as direct tax.
IRD Spokesperson Yagya Prasad Dhungel explained that the drop in income
tax collection was a usual trend in the first quarter of the fiscal year, as a majority of taxpayers will not have filed their tax returns during this time.
Taxpayers need to declare and submit tentative tax returns in advance to the department. “However, the collection of interest tax and house rent tax was satisfactory,” Dhungel said.
Likewise, the IRD fell short of the value added tax (VAT) target. The department collected Rs12.90 billion in VAT, achieving 97 percent of the target. However, excise duty collection exceeded the target. The IRD received Rs7.73 billion against the target of Rs7.36 billion during the review period.
Dhungel said an increase in the number of cases of tax evasion recently had led to the drop in VAT collection. Proliferating use of counterfeit excise duty stickers and growing practice of not issuing VAT bills have led to slow revenue collection, he added. Dhungel said IRD had intensified market inspection from the past month due to these reasons.
“A total of 600 taxpayers have been fined for not paying their taxes on time. The department has started scrutinising 21 large taxpayers who are suspected to have cheated the government by evading tax,” said Dhungel. He added that the department had instructed the concerned taxpayers to maintain updated transaction records and issue a VAT bill while making a sale.
Dhungel said they were hopeful of meeting the revenue collection target for the first three months. “Apart from increasing market monitoring, the department has asked the concerned authorities to devise and implement a special work plan to meet the revenue target,” he said. “We have been conducting a gap analysis at the micro level to find the root cause behind the shortfall in revenue collection.”
Likewise, the IRD has missed the education service tax and health service tax targets. The department collected Rs156.6 million in education service tax against the target of Rs177.95 million and Rs250.4 million in health service compared to the goal of Rs343.01 million.The government has fixed a revenue collection target of Rs299.91 billion for the fiscal year 2017-18.