CONTRIBUTION OF VALUE ADDED TAX IN TOTAL REVENUE OF NEPAL

Abstract

In the study, The analysis has been done about contribution of VAT on Total Revenue and GDP of Nepal with VAT effectiveness in remote area like Sudurpaschim provience Dadeldhura. First of all , this study investigated the contribution of VAT on total revenue of Nepal from 2071/72 to 2079/80 based on secondary data, which is collected through the economic survey from Ministry of Finance, IRD, NRB and from different valid website. And also secondary data analysis has been done about VAT on the basis of information collected from experts, tax officials, businessmen and consumers through questionnaire. The questions were asked to 120 different individuals through 14 question and responded by 110 personal with effected empirical answer. In this study VAT contribution on total tax revenue is about 32.19%, VAT to GDP ratio is 5.5% to 6.5% and VAT based on imported goods and service having around 60 to 65%. The result shows that VAT contribution significantly to total revenue. The findings also reveal that there is the existence of both positive and strong relationship between VAT and GDP. Empirical as well as theoretical analysis showed that, most of the respondents have also viewed in VAT as best instrument for resource mobilization. Similarly, most of the respondents, (Business person, consumer & Officials), argued that billing problem, IRD office, infrastructure, administrative skilled, under billing as hunting problem. They also discussed about legal provisions, behavior of tax personnel, rate of VAT, need of public awareness programs etc. Hence, Government of Nepal should be search for the way to increase revenue from VAT by mostly supporting with the configurations of networks among all the agencies of government and taxing authorities of the federal level, each province and local bodies in order to meet the growth and to facilitate public services for the country.