January 5: The government faces an uphill battle to meet the revenue collection target set for the current fiscal year.

The government is unlikely to meet its target due to the obstruction in the northern border and the meltdown of economic activities due to Covid-19 pandemic.

According to the Ministry of Finance, the government is short of Rs 2 billion in meeting the target of customs duty collection as of mid-December. Likewise, it is lagging behind by Rs 25 billion in tax collection and by Rs 12.18 billion in non-tax collection compared to its target.

As of mid-December, the government has collected Rs 39 billion less revenue that its target.

Officials at the ministry were expecting an increase in import during the current crisis but instead the import of certain goods declined. That also posed a challenge for the government to meet its revenue collection target.

Finance ministry officials say that the government’s failure to expedite development works and construction led to a decline in import of construction materials, equipment and petroleum products. This in turn resulted in low revenue collection.

The government is under pressure for a mid-term review of its revenue collection target. It needs to set a new target and a new approach to meet the target, according to officials at the ministry.

“It is still not certain when the obstruction in northern border and the Covid-19 crisis will end. This has directly impacted revenue collection,” said chief of the Revenue Department Rameshwar Dangal.

According to him, the government has not been able to meet the target of revenue collection in all fronts including customs duty, tax and non-tax.

Dangal further said that the collection of taxes from the tourism industry and educational institutions has been completely halted for the time being. Likewise, revenue collection from the customs points of Rasuwagadhi and Tatopani has been affected since the start of the current fiscal year. Hundreds of containers have been stranded across the border while only a limited number of containers are allowed to enter Nepal on a daily basis. Finance Ministry has requested the Ministry of Foreign Affairs and the Ministry of Industry, Commerce and Supplies to make efforts to reopen the northern border but the uncertainty regarding reopening the border still persists.