India’s Tax Collections Escalate
March 11, 2013 Taxation in India
CALCUTTA – India is hiking taxes in order to boost revenues and close the budget gap without worsening the country’s overall economic health.
In a speech delivered in on March 9th the Chief Executive of the Indian Council for Research on International Economic Relations Parthasarathi Shome said that tax revenues in India in the 2013 – 2014 fiscal year could grow by up to 19 percent compared to the previous year, and he explained that the government is now taking active measures to secure the country’s fiscal position as a step towards improving the India’s credit rating.
Parthasarathi Shome, who also heads a government appointed advisory committee of tax experts, explained that a majority of the forecasted growth will be a attributed to the continuous process of economic expansion in India, while a relatively smaller portion will be a direct result of the government’s own actions to boost revenues.
As an example of measures which will increase overall tax revenues, Parthasarathi Shome pointed to the increase in the levies which charged on the purchase of large vehicles, and noted the extra 10 percent tax which will be paid by individual with annual incomes exceeding INR 10 million.
Parthasarathi Shome claimed that the hikes are intended to only have a minimal negative effect on low income earners, suggesting that the government has specifically chosen not to raise excise taxes and service tax.
He explained that India is now actively trying to facilitate greater levels of foreign investment into the natonal economy, and is taking steps to discourage the outflow of capital from the country, and both measures should help India reach a higher credit rating.
Currently the government expects the national budget deficit to reach 4.8 percent of GDP in coming fiscal year, compared to approximately 5.2 percent for the current year.
Photo by 24thcentury