Wednesday, February 8, 2012

Direct Tax collection likely to miss target this year.

With the direct tax collection growing at a slower pace of 9% this fiscal so far, the government is likely to miss the revenue mop up target for the 2011-12.
According to the data released by the Finance Ministry, the net direct tax mop-up during the April-January period rose 9.28% to Rs 3.46 lakh crore mainly on account higher realisation of personal income tax and corporate tax.
The government, however, may miss the full year direct tax collection target of Rs 5.32 lakh crore which envisaged a growth of 19% over the last year.


The net direct tax collection was Rs 3.17 lakh crore in the 10 month period of the 2010-11 fiscal.
The slow growth in direct tax collection comes on the back of declining GDP growth rate which is estimated at 6.9% in 2011-12, down from 8.4% a year ago.
The gross direct tax collection during the April-January period, however, was up by 14.57% at Rs 4.25 lakh crore. It was Rs 3.71 lakh crore in the corresponding period a year ago.
Amid slowdown in industrial activities due to global factors and high domestic interest rates, revenue collections have come under pressure.
As per the official data, gross corporate tax collection was up 12% at Rs 2.85 lakh crore in April-January from Rs 2.55 lakh crore in same period in the previous fiscal.
The personal income tax collection in the 10 month period of the current fiscal was up by 20.43% at Rs 1.38 lakh crore.
The growth in wealth tax was 45.11% at Rs 682 crore as against Rs 470 crore collected last year.
Amid volatility in the stock market, the securities transaction tax (STT) declined by 27.19% at Rs 4,145 crore. The STT mop-up was Rs 5,693 crore in the year-ago period.
With only two months of the fiscal remaining, the government will have to add Rs 1.86 lakh crore to its tax kitty to meet its budget estimates, which experts say is a tough task.
Even Finance Minister Pranab Mukherjee had said last week that he is exerting pressure on revenue officials to improve tax realisation to meet the total tax (direct and indirect) collection target of Rs 9.32 lakh crore.
"I am putting pressure on my colleagues in the CBEC, CBDT ...And on my behalf Secretary [Revenue] is continuously breathing [down] their neck to improve revenue because our demand and requirement is much more," he had said.
The government needs maximum revenue to contain the widening fiscal deficit, which is likely to shoot up due to higher subsidy bill and poor disinvestment receipts. The government had projected the fiscal deficit at 4.6% of the GDP in 2011-12.
Source : PTI/Business Standard

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