12% growth in tax collections in 2020-21 is achievable: Revenue Secretary
Revenue Secretary Ajay Bhushan Pandey feels that a 12 per cent growth in tax collections next fiscal is achievable in an economy that is projected to clock a 10 per cent nominal GDP growth.
The economy slowing down to its slowest growth in 11 years together with a cut in corporate tax rates led to the government missing its tax collection target by a wide margin in the current fiscal. The tax shortfall also led to slipping on fiscal deficit target for the third year in a row.
Pandey however exuded confidence of meeting the tax collection target of Rs 24.23 lakh crore for 2020-21.
"In 2020-21 the nominal growth that has been projected is 10 per cent. So on a 10 per cent (GDP) growth, getting a 12 per cent growth in tax revenue is achievable," Pandey told PTI.
The 2020-21 Budget has pegged gross tax revenues for the next fiscal at Rs 24.23 lakh crore, up 12 per cent from Rs 21.63 lakh crore in the current fiscal.
Around Rs 6.38 lakh crore is expected to come from personal income tax in 2020-21, a 14.13 per cent increase over Rs 5.59 lakh crore earned in 2019-20.
Besides, corporate tax revenue is budgeted to increase by 11.63 per cent to Rs 6.81 lakh crore in 2020-21, from Rs 6.10 lakh crore in current fiscal.
Pandey said the revenue growth budgeted for current fiscal was calculated assuming a 12 per cent nominal GDP growth. However, the nominal GDP growth came in at t 7.5 per cent.
He said in the current fiscal, the gross tax revenue is 4 per cent higher than Rs 20.80 lakh crore collected in 2018-19 fiscal. However, the government had estimated an 11 per cent gross tax revenue growth in 2019-20.
Pandey further said that this year there has been a tax revenue growth of 4 per cent. "7 per cent growth we had to forego on account of corporate tax (cut). So 4 per cent (growth) means actually 11 per cent achievement.”
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