1

Revenue Performance 2015 – 2016

Overview for FY 2015-16

With the improvement in macroeconomic conditions, the net domestic revenue had increased by 11.5 percent in FY 2015-16. The Department collected a gross revenue of Nu 28,541.616 million, refund disbursed during the year was Nu 507. 804 million and the net domestic revenue was Nu 28,033.812 million. The collection exceeded the target of Nu 26,293.685 million by 6.6 percent. Domestic revenue covered the entire current expenditure in addition to 23.8 percent of the capital expenditure of the government. Net domestic revenue represented 19 percent of the GDP.

 Tax revenue contributed 71 percent to the total net revenue and the remaining from non-tax revenue. Revenue sources like Corporate Income Tax, Dividend, Sales Tax contributed 26 percent, 13.5 percent and 12.7 percent respectively to the total domestic revenue.

Net Collection vis-à-vis Target

Gross domestic revenue for the year was recorded at Nu 28,541.616 million, an achievement of 8.6 percent over the target. As compared to last year, refund decreased by 3.2 percent. Implementation of the online system RAMIS since 2015 has increased the efficiency in collection of taxes through better information management.

Summary of National Revenue FY 2015 – 2016

Sources of Revenue

2014 – 2015

2015 – 2016

( + ) or ( - )

% over Total Revenue

Target

NU

( % )

Tax Revenue (I + II)

18387.335

19884.626

1497.291

8.14

70.93

18390.779

Direct Tax

11626.968

12200.094

573.126

4.93

43.52

11852.286

Corporate Income Tax

6488.775

7459.579

970.804

14.96

26.61

6606.270

Business Income Tax

1585.022

1175.298

(409.724)

(25.85)

4.19

1664.273

Personal Income Tax

1536.156

1770.362

234.205

15.25

6.32

1654.634

Other Tax Revenue

2017.015

1794.855

(222.160)

(11.01)

6.40

1927.109

Motor Vehicle Tax

248.252

42.853

(205.399)

(82.74)

0.15

265.999

Business & Professional Licences

104.952

87.398

(17.554)

(16.73)

0.31

112.000

Airport Service Tax

59.129

64.143

5.014

8.48

0.23

64.941

Dzongkhag Municipal Tax

8.453

4.242

(4.211)

(49.82)

0.02

8.189

Health Contribution

32.190

57.389

25.199

78.28

0.20

0.000

Royalties

1564.039

1538.829

(25.209)

(1.61)

5.48

1475.981

Indirect Tax

6760.368

7684.533

924.165

(13.67)

27.37

6538.492

Sales Tax

3060.067

3576.482

516.415

16.88

12.74

3041.819

Excise Duty

2686.847

2483.068

(203.779)

(7.58)

8.84

2445.970

Customs Duty

447.401

597.392

149.991

33.53

2.13

456.349

Green Tax

545.870

1007.121

461.252

84.50

3.59

573.163

Other Indirect Tax Revenue

20.182

20.469

0.286

1.42

0.07

21.192

Non – Tax Revenue

6753.695

8149.186

1395.491

20.66

29.07

7902.906

Admns. Fees & Charges

350.521

714.227

363.706

103.76

2.55

368.047

Dividends

3692.133

3785.694

93.561

2.53

13.50

3843.322

Transfer of Profit

0.0000

788.678

0.000

0.00

2.81

788.678

Revenue from Govt Departments

454.169

498.478

44.309

9.76

1.78

463.252

Capital Revenue

110.062

120.450

10.387

9.44

0.43

115.566

Other Non – Tax Revenue

115.374

86.706

(28.669)

(24.85)

0.31

126.911

Intrst on Loan from Corporations

2031.435

2154.954

123.519

6.08

7.69

2197.129

 

 

 

 

 

 

 

Total Revenue ( A + B )

25141.030

28033.812

2892.782

11.51

100

26293.685

 

Tax Revenue :-

Tax revenue contributed 71 percent to the domestic revenue with Nu 19,884.626 million which registered an increase of 8.1 percent. Although there was increase from both direct and indirect tax, however indirect tax coupled with increasing imports and revised tax rates since 2014-15 contributed more to the growth.

A)  Direct Tax :-

During the year, the revenue from direct taxes was Nu 12,200.094 million which was an increase of 4.9 percent. Under this source CIT and PIT performed well. Direct tax contributed 61.4 percent to the tax revenue and 43.5 percent to the total domestic revenue.

1)   Corporate Income Tax ( CIT ) :-  CIT continued as the highest contributor to total revenue with Nu 7,459.579 million. It increased by 15 percent mainly due to increase in taxes from companies in hydropower, banking, telecom and mining sector. For the income year (IY) 2015 the total number of corporate units increased to 307 from 286 in IY 2014. It contributed 26.6 percent to the total domestic revenue.

2)   Business Income Tax ( BIT ) :- Business income tax contributed Nu 1,175.298 million, which was a decrease of 25.9 percent from the previous year. With the implementation of RAMIS, segregation of tax deducted at source for various types of taxes has become easier resulting in the change in the pattern of collection of BIT. Total number of registered BIT units increased from 30,549 in IY 2014 to 30,924 units in IY 2015. BIT contributed 4.2 percent to the total domestic revenue.

3)   Personal Income Tax ( PIT ) :- PIT collection was Nu 1,770. 362 million, an increase of 15.3 percent over the previous year. The increase in the number of PIT payers in addition to the effective assessment carried out with information captured by RAMIS had also contributed to the increase. The number of PIT payers increased to 1,07,678 in IY 2015 from IY 71,559 in 2014. PIT contributed 6.3 percent to the total domestic revenue. 

 

Details of Collection under PIT

Nu in Million

Personal Income Tax

2014 – 2015

2015 – 2016

% of Total Revenue

TDS on Salary Tax

1139.549

1480.013

5.3

TDS on Rental Income

29.342

32.436

0.1

TDS on Interest

43.948

18.898

0.1

TDS on Dividend

112.952

72.938

0.3

TDS on Income from Other Sources

60.494

22.933

0.1

TDS on Personal Income Tax

1386.285

1627.218

5.8

Final Personal Income Tax

246.299

248.454

0.9

PIT : Fines & Penalties

6.423

5.975

0.0

 

 

 

 

Gross Total

1639.007

1881.647

6.7

Refund

102.850

111.286

0.4

 

 

 

 

Net Total

1536.156

1770.362

6.3

 

4)   Other Direct Taxes :- The total of various taxes under this source amounted to Nu 1,794. 855 million which was a decrease of 11 percent. Major decline was from motor vehicle tax and royalty from tourism as explained in the subsequent paragraph. Other direct tax contributed 6.4 percent of the total domestic revenue.

Other Direct Tax Collection

Source

Amount

% of Total Revenue

Royalties

1538.829

5.5

Motor Vehicle Tax

42.853

0.2

Business & Professional Licences

87.398

0.3

Airport Service Tax

64.143

0.2

Dzongkhag Municipal tax

4.242

0.0

Health Contribution

57.389

0.2

Total

1794.855

6.4

 

 Royalties :- Total contribution from the four source of royalties amounted to Nu 1,538.829 million. Royalty from tourism contributed Nu 1,161.767 a decrease of 11.9 percent. In the previous fiscal year the royalty from tourism which included the Thai tourist package had brought in significant royalty. Comparatively, the arrival of international tourist during the current year declined. Royalty from forest products amounting to Nu 56.877 million had a nominal increase of 2.6 percent. Royalty from mines & minerals brought in Nu 231.416 million, an increase of 31.7 percent. Royalty from hydropower was recorded at Nu 88.769 million from Dagachhu hydropower plant. Although royalty from three other sources increased, it could not offset the decline in tourism royalty. Revenue from Royalties contributed 5.5 percent to the total domestic revenue.

Collection from Royalties

Sources

FY 2015 - 2016

FY 2014 – 2016

( + ) or ( - )

% to Total Revenue

Royalties from Tourism

1161.767

1319.277

( 157.51 )

4.1

Royalties from Hydropower

88.769

13.571

75.20

0.3

Royalties from Mines

231.416

175.751

55.66

0.8

Royalties from forest

56.877

55.440

1.44

0.2

Total

1538.829

1564.039

( 25.21 )

5.5

 

Motor Vehicle Tax :-  Motor vehicle tax amounted to Nu 42.853 million which was a decrease of 82.7 percent. The adoption of the chart of accounts as per Government Finance Statistic 2014 developed by IMF to classify the various sources of revenue under specific categories has changed the pattern of the record of such collection. The motor vehicle registration fees which used to be earlier recorded under motor vehicle tax is now reflected under motor vehicle fees and charges. Motor vehicle tax contributed 0.2 percent to the total domestic revenue.

Business and Professional License :- Revenue collection under this source was Nu 87.398 million, a decline of 16.7 percent. Revenue from business and professional license constituted 0.3 percent of the domestic revenue.

Dzongkhag Municipal Tax  :-This revenue source contributed Nu 4.242 million which was 0.02 percent of the domestic revenue. It has declined by 49.8 percent. It is likely to decline in future if more Dzongkhags are converted to Thromdes due to administrative and financial decentralization of Thromdes.

Health Contribution :- Gross collection of health contribution was Nu 197.605 million. It constituted 0.2 percent of the domestic revenue.

Airport Service Tax :- Collection under this tax has increased by 8.5 percent to Nu 64.143 million. The increase can be attributed to the increase in the number of passengers. This tax constituted 0.2 percent of the total domestic revenue.

 

B)   Indirect Tax :-

With the introduction of tax measures from July 2014 and the lift of import ban on selected commodities, revenue from indirect taxes had significantly increased. As compared to 2014, imports from India and countries other than India increased by 19.6 percent in 20153 . Indirect tax collection during the year was Nu 7,684.533 million which shows an increase of 13.7 percent from the previous year.

1)   Sales Tax :- Sales Tax increased by 16.9 percent to Nu 3,576.482 million. Sales tax collected from good & commodities, beer, aerated water & alcoholic drinks and telecom services contributed to the increase. there was decrease in the global price of fossil fuel during the year which decreased the Sales Tax from petroleum products by 39.5 percent. Sales Tax contributed 12.7 percent to the total domestic revenue.

Collection from Sales Tax

Source

Amount

% of Total Revenue

Sales Tax on goods (point of entry & sale)

2029.540

7.2

Sales Tax on Bear, alcoholic drinks & aerated water (point of sale)

793.925

2.8

Sales Tax on Petroleum Products (point of Entry)

234.065

0.8

Sales Tax on Hotels (services)

317.530

1.1

Sales Tax on Cable/TV cinema (services)

23.323

0.1

Sales Tax on Telecom Services (services)

178.099

0.6

Total

3576..482

12.7

 

2)   Excise Duty :- Excise Duty contributed Nu 2,483.068 million which constituted 8.9 percent of the total domestic revenue.

3)   Excise Duty from Distillery products :- With the launch of new products and re-engineering their marketing strategies, AWP had performed well during the year increasing its revenue by 12 percent to Nu 539.079 million. It contributed 1.9 percent to the total domestic revenue.

4)   Excise Duty Refund from GoI  :- Excise Duty receipt in FY 2014-15 was for the year 2013 amounting to Nu 1,756.537 million and arrear for past year of Nu 449 million. Excise Duty refund receipt in FY 2015-16 was for the imports pertaining to the year 2014 amounting to Nu 1,943.989 million. Excise duty refund from GoI constituted 6.9 percent of the total domestic revenue.

Tax Collection from Excise Duty

Source

2014 – 2015

2015 – 2016

% of Total Revenue

Excise Duty Refund from GoI

1756.537

1943.989

6.9

Arrears of past years

449.000

0.000

0.0

Excise Duty on Distillery Products

481.311

539.079

1.9

Total

2686.848

2483.068

8.9

 

5)   Customs Duty :- Revenue from Customs Duty amounted to Nu 597.392 million, which was an increase of 33.5 percent. Trade with countries other than India (COTI) increased by 58.2 percent from the past year resulting in the significant increase in collection. Customs duty constituted 2.1 percent of total domestic revenue.

Particulars

Year 2015

Year 2014

% (+) or (-)

Trade with India

 

 

 

Total Imports with electricity

53740.500

47847.622

12.3

Total Imports without electricity

53490.850

47528.600

12.5

Trade with COTI

14296.820

9036.920

58.2

Total Imports with electricity

68037.320

56884.542

19.6

Total Imports without electricity

67787.670

56565.520

19.8

 

6)   Green Tax :- During the year, Green Tax contributed Nu 1,007.121 million an increase of 84.5 percent. Of the total Green Tax, vehicle import contributed Nu 659.383 million and 174.340 million litre of fuel import contributed Nu 347.738 million. Green Tax contributed 3.6 percent of the total domestic revenue.

7)   Other Indirect Tax Revenue :-  Total revenue collected from other indirect tax revenue was Nu 20.469 million which was a increase of 1.4 percent. It constituted 0.07 percent to the total domestic revenue.

Non – Tax Revenue

With a collection of Nu 8,149.186 million, non-tax revenue contributed 29 percent of the domestic revenue. Revenue under this source increased by Nu 1,395.491 million mainly from RMA’s transfer of profit, Adm. fees & charges and Interest on loan from corporations.

Comparison of Non – Tax Revenue for Fiscal Year

Source

FY 2015 – 2016

FY 2014 – 2015

% (+) or (-)

% of Total Revenue

Admn, fees & charges

714.227

350.521

103.8

2.5

Dividends

3785.694

3692.133

2.5

13.5

Transfer of Profits

788.678

0.000

0.0

2.8

Pevenue from Govt. Departments

498.478

454.169

9.8

1.8

Capital Revenue

120.450

110.062

9.4

0.4

Other Non – Tax Revenue

86.706

115.374

(24.8)

0.3

Interest on loan from corporations

2154.954

2031.435

6.1

7.7

Total