The government’s revenue projections may go for a toss as tax collections in the ongoing financial year (2019-20) are likely to miss estimates by a huge margin, former finance secretary Subhash Chandra Garg said on Sunday. According to Garg, this year’s tax mop-up could fall short of targets by a whopping Rs 2.5 lakh crore or 1.2% of the GDP.
The government expects gross tax revenues of Rs 24.59 lakh crore in the current fiscal. However, Garg feels corporate tax, excise duties and customs would witness negative growth in collections. Therefore, from a tax revenue perspective, FY20 is going to be a “dysfunctional year”, he said in his blog post, adding that it’s high time the dividend distribution tax was abolished.
Garg, who took voluntary retirement after he was shunted from the finance ministry to a less glamorous role as power secretary in October last year, said this is the right time to unleash the much-needed reforms in the taxation structure as the underlying tax revenue situation continues to be grim.