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Indian Tax Revenues Underperform

by Mary Swire,, Hong Kong

28 February 2013

Indian gross tax revenue for the first nine months of the current financial year fell significantly short of Finance Ministry targets, in spite of year-on-year growth of 15%.

These shortcomings are revealed in a new document, the Economic Survey 2012-13, published ahead of P. Chidambaram's first Budget as Finance Minister. Revenues for the period April-December, 2012 totaled INR6.83 trillion (USD126.1bn). The Budget estimates projected a figure of INR10.77 trillion.

However, a number of taxes performed well in comparison to the same period in 2011. Excise duty revenues rose by 17.4%, customs duty revenues by 6% and service tax by 33%. There was also a 22.5% increase in personal income tax revenues, and a 10.6% rise in the corporate tax figure. However, the Finance Ministry had projected a 15.5% increase in the revenue generated through corporate tax. Worse still, excise duties under-performed on Budget projections by 16%, and customs by 16%. Service tax and personal income tax were the only taxes to outperform expectations, and were above target by 5.9% and 7.6% respectively.

Chidambaram will unveil his Budget on February 28.

TAGS: Finance | tax | India | fiscal policy | budget | corporation tax | excise duty | revenue statistics | individual income tax

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