The tax collection figures for April-October period have given the government a reason to cheer amidst a gloomy economic outlook with high inflation and higher interest rates and compressing industrial output. The gross direct tax collection for the seven-month period in the current fiscal has registered an impressive 20.28% growth to R2,84,081 crore against a collection of R2,36,176 crore in the same period last fiscal. The growth has come mainly on account of an increase in corporate tax mop-up that rose 20.35% to R189,872 crore against R157,767 crore in April-October figure the last year.
While the growth has been impressive fears remain that tax collections may slip the targeted levels due to slowdown in economic activities in the remaining months of the fiscal. The higher tax collections in the seven-month period is only about 48.5% of the R5.85 lakh-crore target (revised upwards from a level of R5.32 crore earlier) for the entire fiscal and this could make the task of achieving annual tax collection target difficult. Government, however, has maintained a brave face and maintained that all revenue targets would be achieved.
Tax collection is important for the government to achieve its fiscal deficit estimate of 4.6% of the GDP in the current fiscal. The target has become challenging after finance ministry decided to borrow R53,000 crore more than the budgeted level. The government will now borrow R2.2 lakh crore between October and March as against to the original plan of R1.67 lakh crore.
As per official figures, the net direct tax collections for the April-October period has registered a growth of only 7.1% at R2,18,850 crore, year-on-year. The net figures is arrived at after accounting for refunds that has been heavy in the first quarter period. In the direct tax collection figures, the gross personal income tax collection has also grown in the seven month period by 20.17% at R93,769 crore. The growth in the wealth tax, an official government statement said, is higher by 10.6% at R418 crore against R378 crore in the same period last fiscal.