- January 20, 2020
- Posted by: admin
- Category: Daily News
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- The government’s tax collection is likely to fall short of its estimate by INR2.5tr or 1.2% of GDP in 2019-20, former finance secretary Subhash Chandra Garg said on 19 Jan 20 while calling for scrapping of dividend distribution tax.
- Garg in a blog said that from the tax revenues perspective, 2019-20 is proving to be a dysfunctional year. “Time to junk DDT and reform personal income tax,” he said.
- The government had budgeted gross tax revenues of INR24.59tr.
- “Setting aside INR8.09tr as the share of the states, the budgeted net tax revenues to the Centre was kept at INR16.50tr. This was INR3.13tr higher than the provisional/actual net tax revenues of INR13.37tr collected in 2018-19, an increase of 23.4%. Indeed, it was quite a steep target,” Garg noted.
- He said corporate tax, excise duties and customs are likely to see negative growth in collections in 2019-20, something of the order of 8% in corporate taxes, about 5% negative growth in excise duties (INR2.2tr against INR2.31tr) and about 10% lower collection in customs duty (INR1.06tr against INR1.18tr).
- Garg pointed out that overall, there is likely to be shortfall of INR3.5tr – INR3.75tr in gross tax collections of the Centre.
- Noting that this is quite a steep shortfall in collections, unlikely to be bridged by either higher accrual under the non-tax revenues or expenditure compression, he said, “Therefore, revision of fiscal deficit goal of 3.3% by 0.5% to 0.7% appears quite inevitable.”
20-Jan-2020
