Demonetisation, GST boost tax collections

The Survey says measures to curb black money and encourage tax formalisation, including demonetisation and GST, have increased personal income-tax collections substantially. “From about 2% of GDP between 2013-14 and 2015-16, they are likely to rise to 2.3% of GDP in 2017-18, a historic high,” the Survey said.

The actual contribution of these measures in boosting personal income tax collections varies, depending on methodologies followed.

An econometric exercise yields an estimate of Rs 40,000 crore over the two fiscal years of 2016-17 and 2017-18, it said. Another, based on comparing the difference in actual tax buoyancy in 2016-17 and 2017-18 over the previous seven years’ average buoyancy, yields an estimate of about Rs 65,000 crore. Both assessments exclude the Rs 25,000 crore collected under the IDS and Pradhan Mantri Garib Kalyaan Yojana.
“Thus, the sum of all government efforts increased I-T collections, thus far, between Rs 65,000 and Rs 90,000 crore,” it claimed. “These numbers imply a substantial increase in reported incomes (and hence in formalisation) of about 1.5% to 2.3% of GDP.” Separately, the Survey points to a substantial increase in the number of new taxpayers following demonetisation.

Source:https://economictimes.indiatimes.com/news/economy/policy/demonetisation-gst-boost-tax-collections/articleshow/62702025.cms

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