Kathmandu. If the government increases the interest earned by common people from deposits in banks by one percent from the next financial year (FY) 2080/81, an additional revenue of 3 billion will be collected. Earlier, 5 percent tax was levied on deposits of general public, but it has been increased to 6 percent from the budget of the year 2080/81.

The government has kept the interest tax levied on institutional depositors unchanged at 15 percent. Interest tax was charged at 6 percent earlier on personal deposits, but after it was reduced to 5 percent, it was again maintained at 6 percent.

At present, deposits of common people in banks and financial institutions of 'A', 'B', 'C' and 'D' categories are around 36 trillion. Currently, the average interest rate of individual deposits is 8 percent, so common people get interest of around 2 trillion 88 billion from that deposit. When interest tax was levied at the current rate of 5 percent, 14.4 billion was collected annually. However, now with 6 percent tax, the total tax comes to 17 billion 28 billion. In this way, with a one percent increase in interest tax, the government will collect 2 billion 88 million rupees in additional tax. However, as the size of deposits will increase in the coming year, the tax amount will also increase.

Till March of the current year 2079/80, the government has collected a revenue of 25 billion 21 crore rupees from interest tax. However, it is also a tax on the interest of institutional deposits. As the interest tax levied on institutional depositors is 3 times higher than that levied on general public, the revenue from interest tax on institutional deposits is also higher.

According to the data published by the Bank Supervision Department of Nepal Rastra Bank, the share of general deposits in the total deposits of commercial banks is 60.89 percent. According to data of Nepal Rastra Bank, the total deposits of banks and financial institutions reached 54 trillion 84 billion till the end of March last year. According to the data of Nepal Rastra Bank, 34 trillion 30 billion rupees are personal deposits. In addition, the interest rate of 5% on savings collected by microfinance financial institutions from member savers has increased to 6%. The microfinance institutions have collected savings of 1 trillion 67 billion rupees till the end of March. Thus, by the end of March, personal deposits in the financial system will be 37 trillion 97 billion rupees.