Revenue collection not satisfactory: Mahat

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KATHMANDU, May 30 - Finance Minister Dr Ram Sharan Mahat has said though the revenue collection lately has improved, the government’s performance in the revenue front is still not satisfactory and revenue potentials have not been fully utilized.

"There is a need for extra efforts to boost the government revenue collection as envisaged in the last budget. Attention must be paid to achieve the target within the next one and half months," Mahat said.

Minister Mahat was speaking at an interaction program at the Ministry of Finance, organized with a view to address the present obstacles that government officials have been facing in the revenue collection . The program also comes as feedback for the preparation of the budget for the next fiscal year, which is to be presented soon.

Various departmental heads, including the heads of different customs offices, Value Added Tax (VAT) offices and Income Tax offices attended the program. A clearly unsatisfied Finance Minister Mahat was addressing the government officials urging for a more concentrated effort for achieving the revenue targets. "Employ all possible means to meet the revenue target. There should be no slackness," he sternly said.

Mahat stressed upon the need to strengthen inter-departmental coordination and work coherently for generating greater revenue. In addition, pointing at the weaknesses of the various departments, he said, "If necessary, even legal provisions have to be changed."

Highlighting the various problems in customs administration, income tax and VAT, Minister Mahat said, "There is an utmost need to implement Automated System of Customs Data (ASYCUDA) for effective revenue mobilization."

"ASYCUDA allows quick availability of customs data, which can be used to compare the transaction value of various goods at different customs check points," he said, especially to address the present problem of under-invoicing faced by the customs department that has seriously threatened the effective implementation of VAT. ASYCUDA has been implemented in all major border customs points, except Tatopani and Kakarvitta.

Minister Mahat also said that problems like under-valuation at the customs points, lack of proper billing in the VAT system and narrow base of income tax are seriously impairing the overall revenue collection of the government. "Unless under-invoicing at customs points is stopped, billing and compliance in VAT improved and the base for income tax increased, there is little scope for increasing the government revenue," said Mahat.

Emphasizing on the need to enlarge the income tax base, Mahat said that the Tax Department has not been able to reach into some of the areas like rental services, NGOs and INGOs, and local agents for contractors, among others.

Similarly, with a view to enhance the efficiency of government offices, Mahat said that there should be an effective system whereby files are cleared and assessed within a very short span. The efficiency of the government offices must be modified from the working pattern of the past to a more modern and taxpayer friendly, Mahat said.

On the same occasion, participants at the program suggested Minister Mahat on the various steps that could be taken in the next budget for a more effective revenue mobilization. While income tax officials lamented over the huge amount of money locked up as dues from government entreprises, customs officials said that there is no uniformity in the valuation of goods at the customs points.

Financial sector reform urged for ICT

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KATHMANDU, May 30 - Minister for Science and Technology Surendra Prasad Chaudhary has urged the financial sector to exploit Information and Communication Technology (ICT) for enhancing their efficiency and reducing cost.

Minister Chaudhary was inaugurating as workshop on Information and Communication Technologies (ICT) in Nepal’s financial sector here Wednesday.

ICT is the only sector in which the geography of the nation does not pose any hurdle in the development works. Therefore, failure to tap the potential of ICT will push nation decades back in its development efforts, said the minister.

Dr Richard Vokes, Resident Representative of the Asian Development Bank (ADB) said that the purpose of the workshop was to deal with the technical and managerial side of the financial sector. He said the workshop will help the sector to reduce the costs of handling accounts, loans, cheque clearing and credit records among others.

Nepal’s financial sector has very high information and transaction costs. The ‘marriage’ of corporate financial governance and ICT is essential if the full potential of financial sector reform is to be realized, he said.

ICT can lead Nepal to benefit effectively from new economic and social development opportunities which mainly come from the increasing importance of reducing transaction and information costs, he added.

Professor John Adams of the Focal Point for Financial Sector Reform, Ministry of Finance said the objective of the workshop was to understand that Corporate and Financial Governance (CFG) can not proceed effectively from this point without a vigorous, interdependent movement of ICT.

He also demonstrated that the combination of CFG and ICT is expected to add over the next 3 to 5 years and plus 2 per cent point to the rate of economic growth and the main effects will operate on and through Nepal’s service sectors, with spillovers into some components of industry and culture.

Professor Adams added that the bottom of continuing to implement CFG reforms and the speedy introduction of ICT into Nepal’s financial sector offers to government, private banks and business, donors, workers and consumers a growth machine of unrivaled importance to the economy at this stage of development.

Member of National Planning Commission, Dr Rameshananda Vaidya stressed upon the need of exploiting the potentiality of IT in creating job opportunities, making the global information accessible to the rural populace so that it could help in reducing poverty.

Paul Childs, representative of Intelcon Research and Planetworks and Dr P V Gulati also shared their experience on the occasion.

The workshop was jointly organized by ICT for Improved Financial Services Provision Project, Ministry of Science and Technology under the support of Focal Point for Financial Sector Reforms, a technical assistance funded by the Asian Development Bank.