Fiscal Nepal
First Business News Portal in English from Nepal
KATHMANDU — The government provided Rs 85.23 billion in customs revenue exemptions during the fiscal year 2081/82, according to the 63rd Annual Report of the Office of the Auditor General, raising concerns over revenue mobilization and transparency in tax concessions.
The report states that customs revenue waivers increased compared to the previous fiscal year. In FY 2080/81, the government had granted exemptions worth Rs 79.87 billion, meaning customs tax relief rose by more than Rs 5.35 billion year-on-year.
The Auditor General said the exemptions were provided under provisions of the Economic Act, allowing the government to waive customs duties for selected imports, projects, and sectors.
However, the report pointed to weaknesses in record-keeping related to tax exemptions. It noted that while exemptions were also granted on internal revenue, the Ministry of Finance and the Inland Revenue Department failed to maintain proper records of such waivers.
According to the report, imports under the South Asian Free Trade Area (SAFTA) facility received Rs 5.71 billion in customs duty exemptions during the year.
Likewise, the government granted Rs 6.12 billion in customs duty waivers to various projects, construction companies, and government agencies.
The Auditor General also raised concerns over how tax exemptions are being utilized in public construction projects. The report said that while tax exemptions are often not reflected in project cost estimates during procurement, contractors receive concessions later through a “master list” mechanism after contracts are signed.
As a result, the direct financial benefit appears to be flowing more to construction contractors than to development projects, while adjustment of those waived amounts into project costs remains limited.
The report warned that extensive customs duty exemptions have also affected the government’s revenue mobilization capacity, potentially reducing fiscal resources available for public spending.
Your email address will not be published. Required fields are marked *
Comment *
Name *
Email *
Website
Save my name, email, and website in this browser for the next time I comment.
