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May 5, 2000
Tax collections exceed revised estimates, but growth rate elusive
Tax collections, both direct and indirect, registered a 19.27 per cent growth in the just-ended financial year as compared to the previous year, Minister of State for Finance V Dhananjaya Kumar said today.
The total collections in 1999-2000 were Rs 1,701.18 billion, against the revised estimates of Rs 1,693.85 billion and Rs 1,426.31 billion collected in 1998-99.
The actual collection was 104 per cent of the revised estimates, Kumar told reporters.
The ministry has fixed a realistic overall growth rate of 17.37 per cent for the current year and figures for April showed that this could be achieved, he said. About 25 per cent growth is expected in direct taxes -- 30 per cent in corporation and 24.8 per cent in personal income tax.
This would be possible mainly due to better industrial output and industrial growth, currently placed at 12 per cent, and in view of the decision to cover 133 more towns and cities under the one-by-six criteria which would increase the number of assessees.
The estimated tax collection for 2000-01 is Rs 1,996.74 billion from four major taxes -- excise, customs, corporate and personal income tax.
Excise is expected to yield Rs 709.67 billion, customs 535.72 billion, services Rs 30.30 billion (indirect taxes totalling Rs 1,275.69 billion), corporation tax Rs 400 million, income tax Rs 315.90 billion and other residual taxes Rs 4.75 billion (direct taxes totalling Rs 721.05 billion).
Kumar said the growth in indirect taxes for the current year is expected at 13.36 per cent -- excise 15.6 per cent, customs 10.88 per cent and other taxes 7 per cent.
The corporation tax is anticipated to grow by 30.4 per cent, of income tax by 24.8 per cent.
''This is a healthy trend,'' and belied the apprehensions expressed in the Lok Sabha (Lower House of Parliament) yesterday that the growth in direct taxes is minimal, the minister said.
On the arrears front, efforts are being made to collect these through settlement commissions that are working in full swing and appellate authorities.
The law ministry has been approached to help in expediting disposal of court cases. The total amount locked up as arrears amounted to a staggering Rs 580 billion, including penalty and interest.
In April this year, the total tax collection was Rs 74.10 billion, with direct taxes accounting for Rs 16.17 billion, against Rs 64.06 billion collected during the corresponding month last year.
The April figure is expected to go up considerably as the return for the second half of the month can be filed in two weeks under the new excise guidelines, Kumar explained.
The phasing out export incentives, increase in dividend tax from ten to 20 per cent and the income tax surcharge would yield an additional Rs 50 billion.
The tax sops to various industries announced this week by the finance minister would amount to Rs 10 billion, Kumar said.
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