NEW DELHI: The government has credited better compliance and economic recovery for the significant jump in tax-GDP ratio to 11.7 percent in 2021-22. Direct tax to GDP ratio stood at 6.1 per cent and the indirect tax to GDP ratio at 5.6 per cent.
According to the government, economic recovery supplemented by the vaccination drive, better compliance efforts in taxation, digital push, among others, helped in achieving this feat. The tax to GDP ratio was at 10.3 percent in FY21 and 9.9 percent in FY20.
“Several initiatives taken by the Government under its mission to push for a Digital India have laid the foundation for a modern, convenient and transparent taxation system. These include a faceless assessment system, e-filing portal, and rolling out of the new annual information system for easier filing of income tax returns and the generation of e-way bills under the GST system, among others,” the Finance Ministry said in a note.
During the year, the government could give a tax refund of `2.24 lakh crore which was possible due to a new e-filing portal, which was launched in June 2021. Besides that, the faceless hand-holding of the taxpayers, provided by the new annual information system (AIS), also helped garner higher revenue. Meanwhile, the corporate tax returns filed by businesses have jumped by 43,000 to over 9,86,000 for AY 21-22.
This jump in corporate tax returns is the highest in recent years. The remarkable aspect of this particular jump in returns is that it has come with respect to a year marked by a pandemic-induced contraction in the economy, further underscoring the role enforced by compliance measures, the note stated.