The drop in revenue from import of readymade garments,and tobacco products and its raw materials in the first eight months of currentfiscal year, i.e. from mid-July 2017 to mid-February 2018, has left governmentofficials worried.

The government has set overall revenue growth target at25 percent in FY2017/18.
According to statistics compiled by Department of Customs, revenue from importof readymade garments fell by 10 percent to Rs 1.69 billion, while revenue fromtobacco product and its raw materials drop by 6 percent to Rs1.29billion. 

Import of raw materials of tobacco and tobacco productsfell to Rs 1.82 billion in the first eight months compared to Rs 2.03 billionin the review period of last year. 

Garment imports increased by a whopping 91 percent to Rs11.44 billion till eighth month of the current fiscal year ending mid-Februarycompared to import figures of the same period of the last fiscal year. However,its imports saw a sharp fall in the eighth month of FY2017/18 to Rs 1.2 billionfrom Rs 2.3 billion in the seventh month. 

Government officials also say that the import ofreadymade garments has come down considerably in the ninth month or (mid-Feb tomid-March) but the data of the period has not been made public. They believethat many traders might have stopped ordering garments after Finance MinisterYuba Raj Khatiwada announced to curb under-invoicing at the customs point afterhe assumed office on February 27.  

Government officials are investigating the issue andtrying to find out reasons behind significant drop in revenue. Securityagencies have beefed up inspection at border points and nearby areas to curbsmuggling of goods from India. As the revenue collection has remained below thetarget set by the finance ministry, the government has been forced to continueinternal borrowing to arrange funds for its spending. 

Drop in revenue was one of the several issues discussedat a joint meeting of officials of Ministry of Finance and Ministry of HomeAffairs last week. The meeting of Revenue Leakage Control High Level MonitoringTeam led by Finance Minister Khatiwada last week focused on ways to improverevenue collection from customs points.

Home Secretary Prem Kumar Rai and chiefs of Nepal Policeand Armed Police Office had also attended the meeting. 

Speaking at the meeting, Minister Khatiwada directedofficials to recruit depute staff with clean image and high morale in revenueadministration, according to a press statement issued by the ministry after themeeting.       

Revenue Secretary Shishir Dhungana said that the financeministry was investigating the significant fall in revenue collection ingarments and tobacco products as well as studying measures taken to curbsmuggling at border points. 

“We assume that garments and tobacco products are beingimported through illegal channels after the government took measures to controlunder-invoicing at customs points,” Dhungana.

Source : My Republica, 25th April 2018