India's gross tax receipts surged to a record high of £271 billion for 2021-22. This was due to robust revenues from income, corporate taxes, customs and GST on the back of a strong economic recovery and rising compliance.
The higher mop-up also led to the highest tax-to-GDP ratio in 23 years at 11.7%. Against the Union Budget estimates of £222 billion, the revenue receipts according to the pre-actual figures totalled £271 billion, about £50 billion above the Budget estimate. This shows a growth of 34% over last year’s revenue collection of £203 billion, led by 49% surge in direct taxes and supported by 20% growth in indirect taxes. This revenue growth has been propelled by rapid economic recovery after successive waves of Covid, supported by one of the largest immunisation programmes of the world run by the government.
“A lot of technology is being used where GST figures are now being matched with income tax figures and compliances are being ensured. All this has resulted in better compliance and better revenues, both in direct and indirect taxes,” revenue secretary Tarun Bajaj said. He said that 2021-22 marks the highest tax-GDP ratio of 11.7%, with direct tax-to-GDP ratio at 6.1% and indirect tax- to-GDP ratio at 5.6%.
Direct taxes, which include personal income tax and corporate tax, totalled £141 billion, showing a growth of 49%, which is the highest growth rate recorded in a long time according to Bajaj. Corporate taxes rose 56.1% to £86 billion, while personal income tax receipts shot up 43% to nearly £75 billion.
