Government to revise non-tax provisions

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    Ministry of FinanceKATHMANDU: A report prepared by the government has proposed reviewing royalty fee structure for hydropower companies and those engaged in logging business; fining contractors who fail to complete projects related to physical infrastructure on time; and raising mountaineering fee to increase the contribution of non-tax revenue to the total revenue.

    The report prepared by a team appointed by Ministry of Finance (MoF) to suggest measures to raise non-tax collection had started conducting the study earlier this fiscal. The team had held discussions with various ministries prior to finalising the report.

    “We are currently reviewing the report. We may implement some of the recommendations laid in it next fiscal,” a high-ranking MoF official said.

    The report suggests that collection of non-tax revenue has suffered over the years due to lack of appropriate policies, legal framework and administrative capacity. Also, lack of a body to monitor collection of non-tax revenue at local and central levels has hampered non-tax revenue collection, says the report.

    The government generates non-tax income through various fees such as real estate registration fee, royalty fee slapped on mining, hydropower, forestry and mountaineering sectors, and tourism fee, among others. 

    In the first 10 months of current fiscal, the government generated Rs 35.09 billion through various non-tax revenue sources. This money, however, made up only 12.53 per cent of the total revenue collection. 

    To raise its contribution, MoF should set up a separate division at the ministry so that policies could be framed accordingly, says the report seen by The Himalayan Times. “Also, all the ministries should depute a staff of undersecretary level to exclusively look into matters related to non-tax revenue and coordinate with the non-tax revenue division at MoF,” suggests the report.

    The government has been trying to raise the contribution of non-tax revenue to total revenue collection as the existing practice of generating large portion of income through taxes, especially those levied on imports, is considered unsustainable.

    To increase collection of non-tax revenue, the report has suggested that the government start slapping royalty fee on hydropower projects of less than one megawatt, introduce a guideline that clearly specifies royalty fee for hydro projects generating over 1,000 MW of electricity, and collect royalty fee from hydro companies based on production capacity or actual production, whichever is higher.

    The report has also suggested that the government raise the royalty fee for forestry sector, increase registration and licence renewal fee for Class ‘A’ contractors and make upward revisions on fines related to traffic rule violation. 

    It has also recommended that the government look into issue of under-invoicing in real estate business, which is causing revenue leakage. It has also proposed introducing a provision to fine contractors who fail to complete infrastructure projects on time.

    Among others, the report has suggested collecting tender fee based on contract amount, raising licence renewal fee for hospitals, reviewing mountaineering and trekking permit fees, slapping marriage registration fee, and increasing pharmaceutical registration, drugs export authorisation and drugs testing fees.

    Highlights

    • Collect royalty fee from hydro companies based on production capacity or actual production, whichever is higher

    • Raise royalty fee for forestry

    • Make upward revisions on fines related to traffic rule violation

    • Look into the issue of under-invoicing in real estate business

    • Fine contractors who fail to complete infrastructure projects on time

    • Collect tender fee based on contract amount

    • Raise licence renewal fee for hospitals

    • Review mountaineering and trekking permit fees

    • Slap marriage registration fee

    • Increase pharmaceutical registration, drugs export authorisation and drugs testing fees

    Source : The Himalayan Times