Indian Tax Take Grows By 17.6% In 2002/2003

by Mary Swire, Tax-News.com, Hong Kong

24 March 2003

Indian tax revenues grew by 17.6% in the year to March 15 helped by advance tax collections from Mumbai. However, the figure still fell short of the Indian Finance Ministry's revised estimates presented in the Budget.

In raw figures, this equates to R624 billion ($13 billion) received by the government this year against R530 billion ($11 billion) in the previous 12 months. However, it is still short of the government's target by R196 billion ($4 billion) according to official figures of corporate and income tax collections. The Finance Ministry's target of R820 billion ($17 billion) would require an extra 20% growth in net tax collections.

Much of the shortfall is being blamed on large refund payments when corporation tax was reduced, costing the government about R150 billion ($3.1 billion). However, despite this, the corporate tax take still managed to rise 23.7% in the last fiscal year. The district of Mumbai saw a 23.8% rise alone, contrasting with Delhi where there was little change.

There was also a rise in the collection of income tax, which saw an overall increase of 11.7%. The government has forecast R373 billion ($7.8 billion) to be taken from income tax in the current fiscal year, though again it has had to revise its target.

Recommended