Housing, auto market slump inflicts huge revenue loss

KATHMANDU, Dec 28: Stagnation in housing and construction business along with nosediving sales of automobiles has cost the government dearly in revenue collection.

The government suffered a loss of well over a billion rupee over the first five months of 2011/12 solely due to drop in sales and import of private vehicles. If drop in import of chassis of bus and trucks and inflow of mini bus and mini trucks are to be included, the loss touches as much as Rs 2 billion.

Import of car, sports utility vehicles and van had generated revenue of Rs 4.29 billion in the first five months of last fiscal year, shows data of Ministry of Finance. “However, they contributed just Rs 3.08 billion in revenue over the first five months of 2011/12,” said Finance Secretary Krishna Hari Baskota.

Talking to journalists, Baskota said Nepal witnessed a sharp drop in import of cement, MS billet, sugar, betel nuts and electric conductors.

Despite such a huge drop in imports, the government managed to mobilize customs revenue well above the target set for the period.

Baskota attributed the growth to rise in duty, customs valuation and also increase in consumption of items like petroleum products, readymade garment, crude soybean, tobacco, telecommunication equipment and steel rod, among others.

Records show, the government mobilized revenue of Rs 2.70 billion from diesel, Rs 2.17 billion from petrol, Rs 1.14 billion from liquefied petroleum gas (LPG), Rs 1.19 billion from garment trade and Rs 700 million from crude soybean oil.

“Thanks to growth in revenue contribution from these items, we managed to mobilize revenue of Rs 77.70 billion over the first five months of this fiscal year,” said Baskota. The figure is 19.4 percent higher than what the government mobilized in revenue in the same period last year.

Given that the government has set a target to mobilize 20 percent higher revenue than what it collected in the same period last year, officials said the collection recorded for the period is still short of the target.

Source:myrepublica

1Ropani