Indian Tax Revenue Grew

August 11, 2009 Tax HavensTaxation in India  No comments

India’s tax receipts for the April to July period grew 3.27% from the previous quarter.

According to statements released by India’s Central Board of Direct Taxes, the net direct tax take increased to Rs 739.90 billion. This figure is comprised from a 2.6% growth in the intake of corporate tax and a 4.3% rise in personal tax collection. In exact figures, corporate taxes rose from Rs 415.98 billion to Rs 426.85 billion, and personal tax collection reached Rs 312.79 billion from Rs 304.86 billion. Securities Transaction Tax also experienced a 3.5% increase in net collection, in comparison to the corresponding period of the last financial year.

While still positive, the collection is lower than expected by the Indian government. Brighter results were anticipated following recent radical economic reforms, like the simplification of tax laws to ensure higher levels of compliance, introduction of Value Added Tax, alignment of customs duties to typical ASEAN levels, reduction of corporate tax and tax base widening. Prior to its economic slowdown in September 2008, India’s tax take experienced annual growth rates averaging 30-40%.

Outward Direct Investment from India is also experiencing a slow down with only US$16.07 billion coming out of the country in the 2008-2009 year, compared to US$18.1 billion in 2007-2008, an 11.2% drop. Although investment in the tax haven jurisdictions Isle of Man, Cyprus and Mauritius rose US$2.29 billion.

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