Lumbini Province Faces Significant Shortfall in Internal Revenue Collection

Butwal. According to the details of the Lumbini Province Government for the current fiscal year 2082/083 up to Falgun, the province's internal revenue collection has been found to be significantly lower than the target.

According to the Provincial Comptroller and Auditor General's Office, internal revenue has not increased significantly up to Falgun.

Against the target of 4.88 billion 46 million for internal revenue in the current fiscal year, only 1.34 billion 8 million 55 thousand has been collected by the end of Falgun, which is only 27.47 percent of the internal revenue target.

While revenue collection in the province appears highest in the transport and forestry sectors, revenue collection in 'some internal headings' has been extremely low.

In the transport sector, 111.6 million has been collected against a target of 300 million. In percentage terms, this is 37.21 percent of the target. Similarly, against the target of 1.80 billion for driver's licenses and vehicle registration, 494.54 million has been collected so far.

Likewise, 59.545 million has been collected from examination fees against a target of 150 million, and 399.58 million has been collected from forestry income against a target of 1.9974 billion, which is 19.88 percent of the target.

Collection from agricultural income tax also appears low. Against a target of 52,000, only 3,000 has been collected. In the education sector, 180,000 has been collected against a target of 400,000.

Although the target for rental tax on government property was 8 million, only 616,000 has been collected so far, which is 7.71 percent. The target for internal revenue from the sale of agricultural products was 35 million, but only 9.542 million has been collected.

Similarly, 235,000 has been collected against a target of 2.5 million from the sale of government property. Against a target of 500,000 for other service charges, 156,000 has been collected.

51.031 million has been collected against a target of 80 million for administrative service charges. Similarly, 55.179 million has been collected against a target of 150 million for business registration fees. Additionally, 144,000 in royalties not distributed from other sources has been collected. Major sources of internal revenue—service charges, fees, permits, and license fees, and other non-tax revenues—have all failed to meet their collection targets. Progress in many areas is not only weak but some have even shown negative growth.

Why is revenue collection low?

The state of internal revenue collection in Lumbini Province remains low, as in previous years. According to the provincial government, revenue collection is expected to contribute significantly to local development, infrastructure construction, and social welfare programs.

The internal income has weakened, particularly due to the lack of expected growth in service charges, fees, and other non-tax revenues. It is analyzed that this situation has arisen due to a decline in economic activities, a lack of effectiveness in the tax collection system, and unrealistic target setting.

Provincial Ministry of Finance Deputy Secretary Narayan Prasad Paudel claimed that there is still time for collection and that there will be some increase. He stated that additional strategies for revenue collection will be formulated in the upcoming budget. He revealed that since setting high collection targets is generally a tradition, the focus is now on making them more realistic.

According to economic experts, policies to expand the tax base, control leakage, and increase economic activity are necessary to strengthen internal revenue. According to Homraj Bhusal, President of the Lumbini Economic Research Center, the province's dependence on federal grants is likely to increase as internal sources remain weak. He stated that this will affect the implementation of development and construction programs.