Demonitisation move buoying tax collections
Gross collection of tax on corporate and individual earnings jumped 24% so far in FY23 to Rs8.98 lakh crore; GST collections remained above Rs1.40 lakh cr for 7th month in a row at Rs 1.47 lakh crore in September, a 26% increase over last year, reflecting buoyancy in tax collection, says RBI MPC member Ashima Goyal
New Delhi: RBI Monetary Policy Committee (MPC) member Ashima Goyal has attributed the rise in tax collections to demonetisation and said that it will help the nation move towards the ideal situation where low taxes are levied on a large base.
On November 8, 2016, Prime Minister Narendra Modi announced the demonetisation of old Rs 1,000 and Rs500 banknotes and one of the key objectives of the unprecedented decision was to curb black money flows and promote digital payments. Noting that demonetisation had short-term costs, but some long-term benefits, Goyal said it enhanced digitisation and formalization in the economy and reduced tax evasion, although all this has further to go.
"It contributed to the buoyancy in taxes the country is benefitting from today. This helps us move towards the ideal of low tax rates on a large base," she said. The tax department on October 9 said that the gross collection of tax on corporate and individual earnings jumped nearly 24 per cent so far in the current fiscal year to Rs8.98 lakh crore. GST collections remained above Rs 1.40 lakh crore for the seventh month in a row at Rs 1.47 lakh crore in September, a 26 per cent increase over last year, reflecting buoyancy in tax collection.