Riding on a buoyant economy and better tax compliance, gross tax revenue collections are likely to surpass the Rs 6,00,000 crore (Rs 6000 billion) mark in 2007-08. In other words, tax revenue is expected to double compared with Rs 3,04,958 crore (Rs 3049.58 billion) in 2004-05.
"We expect tax revenue collection to exceed Rs 6,00,000 crore by end-March," a senior finance ministry official said.If the collections surpass Rs 6,00,000 crore, the gross tax to GDP ratio will go up to around 13 per cent in 2007-08, compared with Budget estimate of 11.8 per cent and medium term target of 12.7 per cent by 2009-10.
Budget estimate for tax revenue is Rs 5,48,122 crore (Rs 5481.22 billion) in the current fiscal year compared to Rs 4,72,328 crore (Rs 4723.28 billion) in 2006-07, an increase of over 16 per cent.
Much of the credit for the higher tax revenue goes to surge in personal income tax, corporation tax and service tax collections in the last three years. Current year's tax collection trends indicate that except excise duty, all other direct and indirect taxes are likely to meet and exceed Budget estimates.
Direct tax is going to contribute over 50 per cent to the tax revenue in 2007-08 and overtake indirect taxes for the first time. It is expected that direct tax revenue will exceed budget estimate of Rs 2,67,490 crore (Rs 2674.90 billion) by Rs 40,000 crore (Rs 400 billion) to 50,000 crore (Rs 500 billion) in 2007-08.
Indirect tax collections are likely to be around the Budget estimate of Rs 2,78,013 crore, (Rs 2780.13 billion) thanks to customs and service tax collections, which are likely to take care of any shortfall in excise duty.
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