It also noted that improved quality of assessment over the last three years had led to reduction in pendency of direct refund cases.
The slippage in Goods and Services Tax (GST) collection led to fall in tax to GDP ratio by 0.3 percentage points to 10.9% in FY 19 compared to the preceding financial year, the Economic Survey said. The budget estimate for tax to GDP ratio for FY19 was 11.4%.
“The GST collections are yet to stabilise and several changes have been carried out following decisions of the GST Council during the course of the year,” the Survey said.
The provisional actual for last fiscal’s tax collection showed that direct taxes grew by 13.4% as against budget estimate (BE) of 14.4% while indirect tax mop-up fell short of BE by about 16%, the Survey said.
It also noted that improved quality of assessment over the last three years had led to reduction in pendency of direct refund cases. “Better tax administration, widening of TDS carried over the years, anti-tax evasion measures and increase in effective tax payers base have contributed to direct tax buoyancy,” the
Separately, the Survey suggested that government could use behavioural psychology to improve tax compliance by giving top-10 taxpayers in each district recognition by way of “diplomatic”-type privileges at immigration counter, express boarding at airports, and even naming of roads, buildings and schools.
It said that since people often indulge in conspicuous consumption to convey their social status, top-10 taxpayers within a district can be highlighted and accorded due recognition.
This may take the form of expedited boarding privileges at airports, fast-lane privileges on roads and toll booths, special “diplomatic”-type lanes at immigration counters, etc. Further, the highest taxpayers over a decade could be recognised by naming important buildings, monuments, roads, trains, initiatives, schools and universities, hospitals and airports in their name, the Survey suggested.