Direct taxes’ share to rise in FY23: Revenue secy – Times of India

Mumbai: Revenue secretary Tarun Bajaj said on Thursday that the share of direct taxes is set to rise during the current financial year, which needed a correction. He said that direct tax collections go up as tax payers are able to see what information is there with the income tax authorities.
“There was a major item given last year — the annual information system — where we have been throwing information at the tax payer as to what their financial transactions were. This was rolled out in the month of November and the good harvest of taxes is also because of that, as people can see what information is there with the tax authorities,” said Bajaj.
“This year, we have already collected information from banks and companies and there are 16,000 sources that provide us information and the quality of information is better. The idea is to provide this information to the tax payer so that there is voluntary disclosure of income and payment of taxes by people.”
Bajaj’s comments on increasing the share of indirect taxes comes at a time when the record haul under indirect taxes versus direct taxes has been criticised because it hurt the poor more. The government is now focusing on increasing the share of direct taxes. Another reason why the share of direct taxes is likely to go up is the record profits by the corporate sector.
Bajaj said that contact-based services was expected to recover. “PMI services showing good growth, sectors like tourism and hospitality have started coming back. There is growth compared to last year and we hope they will cross pre-pandemic levels this year. But there are challenges, the oil companies are under pressure. Having seen everything and whatever figures are trickling in, I am optimistic.”
The revenue secretary said that last year growth in revenue was 34% with direct taxes growing 20% and indirect taxes growing at 49%. “This brings the tax to GDP ratio close to 11.5% — the highest I have seen in the past. This year we have already completed two months and whatever indicators I have at the moment, I feel very optimistic, and I feel that we would be able to do far better than when we made the Budget. This is despite duty concessions,” he said.
In his speech, Bajaj said that the revenue collection has been averaging Rs 1.4-1.5 lakh crore. This was needed considering that the country was facing challenges of inflation, a rising current account deficit and a widening fiscal deficit. “ We also have to make sure that we grow at a healthy rate. Both the RBI and the ministry of finance have taken steps to control inflation, I hope these bear fruit,” said Bajaj.