House panel calls for even distribution in direct tax collections26 April 2012
Currently, more than one-fourth of the total direct tax collections in a year are done in the last days of the financial year. During the years 2008-09 to 2011-12, the percentage of collection in the month of March to total collections varied from 21 to 26%.
An even distribution of collection would help the Government realise revenues faster without causing undue harassment to the taxpayer, the Standing Committee on Finance said in a report tabled in the Lok Sabha.
This uneven distribution may be mainly due to the practice of pursuing the tax payers to pay more tax than due, the panel said. It could also be on account of raising of demands on scrutiny assessment which are not confirmed subsequently so as to meet the Budget targets at the close of the financial year.
The Finance Ministry may also consider giving incentives to those taxpayers who are paying advance tax on time, the panel headed by BJP leader, Mr Yashwant Sinha, has suggested.
The Centre's direct tax collections grew 10.5 per cent in 2011-12, lower than the 18.22-per cent growth seen in the previous year. While the personal income tax collections grew 15.3 per cent in 2011-12, the growth in corporate taxes was only 8.09 per cent. The additional resource mobilisation in 2011-12 decreased to Rs 46,933 crore from a level of Rs 68,872 crore in 2010-11. The Finance Ministry attributed this low growth mainly to the global meltdown.
There has been no healthy growth in direct tax collections during the past three years as compared to the levels that existed in pre-global crisis era. Although India has been more resilient to the global financial crisis, the Government's efforts to augment the tax resources have not resulted in substantial increase in revenue. Much remains to be done to improve the horizontal equity of the tax system by extending the tax net to hard-to-tax groups, the Panel report said
Source:The Hindu Business Line