The target of increasing the tax revenue by 12 percent for the next financial year (2020-21) may seem difficult, but Revenue Secretary Ajay Bhushan Pandey is confident of achieving this target. Apart from this, he says that this goal is not too difficult for an economy with nominal GDP growth of 10%. The same country's growth rate is currently at an 11-year low. Apart from this, due to the cut in corporate tax last year, the government seems to be missing the target of its tax revenue for the current financial year with a good margin. Apart from this, the fiscal deficit for the third consecutive year is also expected to be higher than the target.
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Despite these circumstances, the Revenue Secretary is confident about the tax collection target set for 2020-21. In an interview, Pandey said, "The nominal growth has been estimated to be 10 percent in 2020-21. Apart from this, a 12 percent increase in tax revenue can be done easily. A target of tax revenue of Rs 24.23 lakh crore has been set in the budget for the next financial year. This is 12 percent more than the Rs 21.63 lakh crore in the current financial year. The target is to raise Rs 6.38 lakh crore from personal income tax in the next financial year. This is 14.13 percent more than the target of Rs 5.59 lakh crore for the current financial year. Corporate tax revenue has been targeted to increase by 11.63 percent to Rs 6.81 lakh crore from Rs 6.10 lakh crore in the current financial year.
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For the current financial year, the government has reduced the tax revenue target from Rs 24.61 lakh crore to Rs 21.63 lakh crore. Pandey said that the tax revenue target for the current financial year was set based on an estimate of 12 percent nominal GDP growth. During this period, nominal growth was 7.5 percent. Explaining this situation, Pandey said, "This year we recorded a growth of four percent in tax revenue. Through the same corporate tax cuts, we left tax revenue equal to the growth rate of seven percent. Similarly, our effective growth in terms of tax revenue was 11 percent. If we can achieve an 11 percent increase in tax revenue at a nominal growth of 7.5 percent, then a 12 percent increase in tax revenue at a nominal growth of 10 percent is not difficult.
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