Fiscal management of provinces dependent less on own resources

KATHMANDU: All seven provincial governments last Wednesday unveiled their budgets for the next fiscal year 2023/24, laying focus on reviving an ailing economy by increasing agricultural production and expanding the social safety net. Except for Koshi Province government which brought its annual budget through an ordinance, six provinces have already presented the Finance Bill along with Appropriation Bill in their respective Province Assembly. Koshi Province has made some changes in its revenue policy through an ordinance itself. Looking at the resource management of the provincial governments, the resource collected from their own revenue sources is less while depending more on fiscal transfers and revenue distribution from the federal government. Therefore, it is seen that the provinces have emphasized expanding both the tax rate and its coverage in order to increase the proportion of inland revenue. The provinces have the right over determining the vehicle tax, houses and land registration, tourism fees, advertisement tax, tax on agricultural income, service charges and fines and other surcharges. The provinces have been making their revenue policy every year incorporating these sectors. In their revenue policies, the provinces have prioritised making the internal sources more effective by expanding the tax ambit in the economic activities falling under their exclusive and concurrent rights, rendering the tax system convenient and technology-friendly, making tax rate up-to-date by revising the tax structure and rate and stressed controlling tax evasion and revenue. Similarly, in the Finance Bill, the provincial governments have included provisions such as exemption on registration and transfer of vehicles, discouraging the use of motor vehicles older than 20 years, making land and house registration and transfer easier, providing some exemption on the registration and transfer of land used for production and exemption on the fine to commercial firms failing to renew for a long time. By RSS READ ALSO:

• Budget session of Koshi Province prorogued
• Lumbini Province policies and programmes passed by a majority
• Sudurpaschim Province Assembly passes policies, programmes