Tax rev­enue forms 70 per­cent of the to­tal rev­enue of the coun­try

Bhutan Times - - Front Page - Sonam Pen­jor

The net col­lec­tion which com­prises of tax and non-tax rev­enue amounted to Nu 23,244.610m, which was an in­crease of 10.2 per­cent or Nu 2,142.919m in 2014 over the pre­vi­ous fis­cal year.

Ac­cord­ing to the Na­tional Rev­enue re­port 2013-2014, the to­tal rev­enue col­lec­tion has also ex­ceeded the re­cur­rent ex­pen­di­ture by 29.9 per­cent. The to­tal rev­enue cov­er­age as a per­cent­age to GDP dur­ing the year was 20.6 per­cent. The tax to GDP ra­tio for the year stands at 14.3 per­cent.

Dur­ing the fis­cal year, the ra­tio of tax to non­tax rev­enue com­po­si­tion stood at 70:30, a trend sim­i­lar to that of the pre­vi­ous fis­cal year. The ma­jor con­trib­u­tors also re­main the same with cor­po­rate in­come tax be­ing the big­gest source un­der di­rect tax con­sti­tut­ing 55 per­cent of the di­rect tax, and ex­cise duty and sales tax un­der in­di­rect tax col­lec­tion con­sti­tut­ing 50.6 per­cent and 42.8 per­cent re­spec­tively, states the re­port.

It fur­ther states that, div­i­dend re­mit­tance un­der the non-tax rev­enue is the ma­jor source con­sti­tut­ing 53.5 per­cent of non-tax fol­lowed by in­ter­est re­ceipts from cor­po­ra­tions.

Although the rev­enue col­lec­tion trend has been in­creas­ing over the past four years at an av­er­age of 10.5 per­cent but due to the Gov­ern­ment re­stricted on some im­ports of goods from abroad, the re­port says that, the re­cent set­back in the econ­omy due to ad­verse bal­ance of pay­ment sit­u­a­tion and the gov­ern­ment re­stric­tions on se­lected im­ports have neg­a­tively af­fected the av­er­age growth rate of do­mes­tic rev­enue. While, the rev­enue tar­get for the fis­cal year was Nu 21,860.885m as re­flected in the Na­tional Bud­get Re­port 2014 based on the ac­tual col­lec­tion for FY 2012-13 and in­cor­po­rat­ing up­dates from rel­e­vant sec­tors. The re­port says that the gross col­lec­tion amounted to Nu 23, 659.907m which is an achieve­ment of 108.2 per­cent to the tar­get.

How­ever, the re­fund dis­bursed dur­ing the year in­creased by 19.7 per­cent com­pared to the pre­vi­ous year bring­ing down the net col­lec­tion to Nu 23, 244.610m and the achieve­ment to tar­get in terms of net col­lec­tion is 106.3 per­cent. It rep­re­sents 20.6 per­cent of the pro­jected GDP, states the re­port.

While, un­der di­rect tax; cor­po­rate in­come tax (CIT) and busi­ness in­come tax (BIT) has ex­ceeded the tar­get con­tribut­ing Nu 7, 911.321m col­lec­tively. Ex­cise duty re­fund from Gov­ern­ment of In­dia (GoI) record an am­ple re­ceipt of Nu 280.169m over and above the tar­get set for the year.

Ac­cord­ing to the re­port, the div­i­dend sur­passed the tar­get un­der non-tax rev­enue with a con­tri­bu­tion of Nu 667.072m over the tar­get of Nu 3, 112.314m.

But amongst the cor­po­rate units, Druk Green Power Cor­po­ra­tion Limited (DGPCL) topped the list with CIT rev­enue of Nu 2,311.907m and div­i­dend of Nu 1,969.479m. The net tax and non-tax rev­enue for the year stands at Nu 16,182.774m and Nu 7,061.836m re­spec­tively, states the re­port.

The re­port fur­ther states that, the net tax col­lec­tion dur­ing the year amounts to Nu 16,182.774m, this com­prises of di­rect and in­di­rect tax, reg­is­ter­ing an in­crease of 5.1 per­cent or Nu 779.656m over the pre­vi­ous year’s col­lec­tion of Nu 15, 403.118m. The col­lec­tions from di­rect taxes have shown an in­crease com­pared to the pre­vi­ous year, how­ever, in­di­rect tax com­pris­ing of con­tri­bu­tion from sales, ex­cise duty, green tax and other in­di­rect taxes has de­creased. The di­rect tax recorded an in­crease of 18.6 per­cent over the pre­vi­ous year’s col­lec­tion, while the in­di­rect tax went down by 16 per­cent. Tax rev­enue forms 70 per­cent of the to­tal rev­enue.

It also states that, di­rect tax col­lec­tion for the year amounts to Nu 11, 132.042m reg­is­ter­ing an in­crease of 18.6 per­cent or Nu 1,742.003m, against the pre­vi­ous year’s col­lec­tion. Di­rect tax con­sti­tutes 47.9 per­cent of the to­tal tax rev­enue and 70 per­cent of the to­tal rev­enue.

Cor­po­rate in­come tax ( CIT) con­tin­ues to be the ma­jor con­trib­u­tor un­der di­rect tax although the in­crease in busi­ness in­come tax ( BIT) and per­sonal in­come tax ( PIT) also has con­trib­uted to the in­crease.

The over­all CIT col­lec­tion dur­ing the year is Nu 6,127.428m; this was an in­crease of 26 per­cent over the pre­vi­ous year.

Mean­while, most of the cor­po­rate units have per­formed bet­ter than the pre­vi­ous year in terms of tax con­tri­bu­tion ex­cept for banks, Bhutan Tele­com, AWPL, PCAL, STBCL etc. but the main con­trib­u­tor to cor­po­rate tax for the year was still the hy­dropower sec­tor and DHI.

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