DPM Paudel stresses coordination to check revenue leakage

By A Staff Reporter,Kathmandu, Feb. 6: The Central Revenue Leakage Control Committee (CRLCC) has stressed the need for an enhanced coordination and collaboration among the stakeholders from the federal to local level to further control the revenue leakage.

Speaking at the meeting of the committee, Deputy Prime Minister and Finance Minister, Bishnu Prasad Paudel, who also serves as the CRLC's coordinator, said that there is a need to tightening control over potential smuggling routes, both around customs checkpoints and alternative ones. 

According to a statement issued by the Ministry of Finance (MoF), he said that a responsible and proactive approach from all agencies could lead to significant success in curbing illegal trade. According to rough estimates from economists and concerned agencies, more than 40 per cent of import and exports happens through informal routes impacting revenue collection. 

Finance Secretary, Dr. Ram Prasad Ghimire, emphasised for a uniform understanding among various agencies regarding imported and exported goods, their classification and usage. He stressed that all efforts should be based on factual data.

Likewise, Revenue Secretary, Dinesh Kumar Ghimire, said that regulating the source of production and imports would make it easier to control the illegal trade. He also expressed confidence that the commitments made by officials in the meeting would be effectively implemented.

Officials participating in the meeting acknowledged gradual improvements in tackling illegal exports and imports but emphasised the need for additional efforts to achieve meaningful results. 

Enhanced border surveillance, stronger market monitoring and prioritising the use of technology for better enforcement are the major recommendations made at the meeting to curb the illegal trade. The meeting was attended by officials from the Ministry of Finance, Office of the Prime Minister and Council of Ministers, Department of Revenue Investigation, Department of Customs, Inland Revenue Department, Department of Money Laundering Investigation, Nepal Police, Armed Police Force, and National Investigation Department, among others.

Earlier in August 2024, a meeting of the CRLCC had decided to meet the target of revenue collection for the current fiscal year by expanding tax-friendly services and controlling revenue leakage. 

It has also decided to form a central rapid patrol team to check the leakage and deploy the team across the southern border. However, the meeting had expressed concerns about not causing any sorrow to the taxpayers conducting business according to the law. DPM Paudel, then, had also instructed the concerned agencies to make surveillance more effective through the adoption of modern technology, make the classification and evaluation of imported goods realistic, encourage the act of taking and giving bills while purchasing goods or services and be ruthless in investigating the business setups promoting fake bills or firms. 

Despite these efforts, revenue collection is yet to be satisfactory. According to the statistics published by the Financial Comptroller General Office, the government could mobilise only 41.48 per cent tax revenue by Tuesday, in almost seven months of the current Fiscal Year 2024/25. 

Rs. 532.86 billion of the annual revenue target Rs. 1284.2 billion has been collected so far. Meanwhile, the non-tax revenue has been impressive with 55.71 per cent achievement which is Rs. 75.25 billion of the annual target of Rs. 135.09 billion.