Inland Revenue Department falls short of revenue target

KATHMANDU: The Inland Revenue Department (IRD) has reported a revenue collection of Rs 310.94 billion in the first eight months of the current fiscal year, signaling a shortfall of approximately Rs 72 billion against the targeted amount for the same period.

Projected to amass revenue worth Rs 383.55 billion between mid-July 2023 and mid-March 2024, the IRD faced challenges in meeting its set objectives. Ananda Prasad Gupta, the IRD’s information officer, disclosed that the revenue collection did not meet expectations during the designated period.

Breaking down the revenue streams, income tax contributed Rs 137.65 billion, while value-added tax (VAT) amounted to Rs 75.33 billion. Additionally, the tax on interest income accounted for Rs 27.02 billion.

Furthermore, the IRD garnered Rs 62.81 billion from excise duty, Rs 4.31 billion from the health service tax, and Rs 2.07 billion from the education service tax over the review period.

Despite concerted efforts, various factors may have contributed to the revenue shortfall. Economic fluctuations, changes in taxpayer behavior, and administrative challenges could have played a role in hindering revenue collection.

In response to the shortfall, the IRD might need to reevaluate its strategies and policies to enhance revenue generation. This could involve streamlining tax collection processes, improving compliance mechanisms, and implementing targeted initiatives to boost revenue from specific sectors.

Addressing the revenue deficit will be crucial for maintaining fiscal stability and meeting budgetary requirements. The IRD may need to collaborate with other government agencies and stakeholders to explore innovative solutions and address the underlying issues affecting revenue collection.

As the fiscal year progresses, stakeholders will closely monitor the IRD’s efforts to bridge the revenue gap and ensure sustainable fiscal management in the long term.