Kolkata, April 5 (IANS) With the Indian government aiming to reclaim its peak high tax-GDP ratio of 11.9 percent soon, union Revenue Secretary Sumit Bose Friday said boosting up of corporate tax collection is key to improving the crucial ratio.
“The finance minister in his budget speech has said the highest tax-GDP ratio of 11.9 percent has to be reached in short-term. When we reached the figure of 11.9 percent, it was the time when the economy was growing,” Bose said.
The tax-GDP ratio, after touching a peak of 11.9 percent in 2007-08, declined to 9.6 percent in 2009-10 and went up marginally to 9.9 percent in 2011-12.
Bose pointed out that high economic growth was the “remedy” for improving the low tax-GDP ratio as high growth would ensure higher corporation tax collection.
“High growth rate will ensure better performance for corporates. And the year when we have done best in taxes is the year when we did very well in corporate tax,” the finance ministry official said while speaking at an interactive session, organised by the Bengal Chamber of Commerce and Industry.
Amid economic downturn, the government has earlier expressed concern about slowing down in corporate tax collection, which is the larger component of direct taxes.
The government’s projected tax revenue collection from corporation tax for 2011-12 was Rs.323,250 crore, while budget estimate of corporation tax collection for 2012-13 was Rs.373,227 crore.
Bose said the government has already met the revised tax collection target of Rs.1,038,036.61 crore for 2012-13.
“We have exceeded the target for indirect taxes. We are close to the target for direct taxes. So, combining (direct and indirect tax collections) we have certainly met the revised estimates,” he informed.
“How much we will exceed (the revised tax collection target) will come to know in the next 10 to 15 days,” he said.
According to him, the new Large Tax payer Unit here would be opened by June this year.
In his budget speech for 2013-14, Finance Minister P Chidambaram said the fifth Large Tax payer Unit in the country would be opened in Kolkata shortly.