Kathmandu, May 6
The Ministry of Finance (MoF), which is currently working on the budget for 2020-21 fiscal year, is finding it difficult to set the revenue collection target for the next fiscal amidst COVID-19 uncertainty.
As it is still uncertain how long the coronavirus pandemic will affect the regular economic activities and revenue collection, setting the revenue collection target for the upcoming fiscal year is proving to be quite a challenge, informed a source at MoF.
“Revenue collection target is based on economic activities and business growth. However, it is difficult to fix the target amid coronavirus uncertainty,” said the official.
The government is expected to miss its revenue collection target of Rs 1.11 trillion for the ongoing fiscal year, which ends in mid-July, by a large margin as business activities have been halted since months due to the lockdown imposed to combat the spread of the deadly virus and tax collection has been hit badly.
Amid criticisms that the revenue collection targets set by the government are not scientific, coming up with the target for the next fiscal has become a major headache for the MoF with the lockdown prolonging and businesses remaining shut.
The Revenue Advisory Committee at MoF has been working on revenue collection and expansion for the next fiscal year through two sub-committees.
“The sub-committees are studying the revenue collection and projection for next year and will soon recommend the budgetary division,” as per the official.
Uttar Kumar Khatri, joint secretary at MoF, said that making economic projections in the budget was certainly challenging as nobody knows to what extent the pandemic will affect businesses and the economy.
“Despite this, discussions and studies are underway regarding revenue collection target and resource management for the next fiscal year,” said Khatri.
As mandated by the Constitution, the government should bring the budget on 15th day of Jestha, which falls on May 28 this year, and the Finance Ministry has accelerated the budget preparation works.
However, MoF is under pressure to accumulate resources for budget implementation amid slow revenue collection due to unfavourable circumstances due to the spread of coronavirus pandemic.
According to Financial Comptroller General Office under the MoF, the government’s total revenue collection as of yesterday stood at Rs 601.35 billion, which is 54.08 per cent of the target for this fiscal.
A version of this article appears in e-paper on May 7, 2020, of The Himalayan Times.