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Internal revenue short of 10th plan need

1 December 2009

The need to collect roughly Nu 88.8 billion from internal sources out of the total 10th plan budget of Nu 148 billion has posed a formidable challenge to the Department of Revenue and Customs (DRC).
Phuentsholing Revenue and Customs Commissioner Ugyen Namgyel said the target and budget outlay for the 10th plan was a concern for DRC as roughly 60 percent of the total budget had to be collected from internal sources.
He said that, unlike in the past when DRC had collected revenue to meet recurrent expenditures, the 10th plan put a lot of pressure on DRC’s effectiveness and efficiency in collecting revenue that was higher than recurrent expenditures.
Ugyen Namgyal said that, to address this new challenge, the department would have to explore new tax bases, review rules and procedures and develop new policies covering tax, customs, sales tax and excise duty.
“Our main source of revenue generation is collection and we have to, at least, cover the expenses for maintenance works,” said Finance Minister Wangdi Norbu. He said Phuentsholing regional office’s responsibility was imperative as the budget figures for the 10th plan were increasing. “The Phuentsholing RRCO is important as it is one of the main revenue generating regions,” he said.
The volume of imports entering Bhutan through the checkpost in Phuentsholing has peaked to a daily average of 422. At certain periods, the imports were as high as 750 in a day.
Ugyen Namgyal said the regional office was successful in preventing tax evasion and non-declaration. The region, he said, also had a sound preventive unit which had been put in place since 2008 to foil smuggling cases.
This year, until September, the preventive unit had confiscated goods worth Nu 800,000 and made seizures worth Nu two million. The regional office also collected duties worth Nu 200,000 and imposed penalties worth Nu one million.
Ugyen Namgyal said the import section of the department had also progressed. This year, till date, the import unit was able to seize Nu one million worth of goods and collected duties worth Nu 400,000. Till date, they have imposed penalties worth Nu 500,000.
At Kharbandi checkpost, penalties imposed amounted to Nu 300,000 in 2008 and Nu 130,000 till date this year.
DRC has registered a revenue collection of Nu 12,345.984 million in the last financial year. The revenue increased by 22.5 percent from the previous year, exceeding the revised target of Nu 11,607.981 million by 6.4 percent.

The need to collect roughly Nu 88.8 billion from internal sources out of the total 10th plan budget of Nu 148 billion has posed a formidable challenge to the Department of Revenue and Customs (DRC).

Phuentsholing Revenue and Customs Commissioner Ugyen Namgyel said the target and budget outlay for the 10th plan was a concern for DRC as roughly 60 percent of the total budget had to be collected from internal sources.

He said that, unlike in the past when DRC had collected revenue to meet recurrent expenditures, the 10th plan put a lot of pressure on DRC’s effectiveness and efficiency in collecting revenue that was higher than recurrent expenditures.

Ugyen Namgyal said that, to address this new challenge, the department would have to explore new tax bases, review rules and procedures and develop new policies covering tax, customs, sales tax and excise duty.

“Our main source of revenue generation is collection and we have to, at least, cover the expenses for maintenance works,” said Finance Minister Wangdi Norbu. He said Phuentsholing regional office’s responsibility was imperative as the budget figures for the 10th plan were increasing. “The Phuentsholing RRCO is important as it is one of the main revenue generating regions,” he said.

The volume of imports entering Bhutan through the checkpost in Phuentsholing has peaked to a daily average of 422. At certain periods, the imports were as high as 750 in a day.

Ugyen Namgyal said the regional office was successful in preventing tax evasion and non-declaration. The region, he said, also had a sound preventive unit which had been put in place since 2008 to foil smuggling cases.

This year, until September, the preventive unit had confiscated goods worth Nu 800,000 and made seizures worth Nu two million. The regional office also collected duties worth Nu 200,000 and imposed penalties worth Nu one million.

Ugyen Namgyal said the import section of the department had also progressed. This year, till date, the import unit was able to seize Nu one million worth of goods and collected duties worth Nu 400,000. Till date, they have imposed penalties worth Nu 500,000.

At Kharbandi checkpost, penalties imposed amounted to Nu 300,000 in 2008 and Nu 130,000 till date this year.

DRC has registered a revenue collection of Nu 12,345.984 million in the last financial year. The revenue increased by 22.5 percent from the previous year, exceeding the revised target of Nu 11,607.981 million by 6.4 percent.

By Pushkar Chhetri

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