FISC COMES OF AGE: DIRECT TAX MOP-UP OUTSTRIPS INDIRECT’S

Indian tax receipts have finally moved into the league of developed economies. A buoyant direct tax mop-up, increasing at over 40% this fiscal, has for the first time left the indirect tax collection behind.The direct tax collection (excluding refunds) until December 2007 crossed the Rs 2,05,000-crore mark, registering growth of 42.36%. Pleased with the rapid rise, finance minister P Chidambaram on Tuesday said, “If the buoyant collection continues and voluntary compliance improves, then there is a case for moderation of tax rates." The minister would present the Budget for 2008-09 in another eight weeks in Parliament. He also said, there would be a new adviser in place of Parthasarathi Shome, who resigned on Friday.Chidambaram stressed that better tax compliance was essential if the rates of direct taxes had to move southwards. But he parried questions on the trend for the coming Budget. He also said, the high growth in direct tax collection would help the government exceed the targeted 11.8 tax-GDP ratio for 2007-08.According to finance ministry figures, the corporate tax collection during April to December 2007 rose by 39.84% to Rs 1,27,683 crore, and personal income tax, including the security transaction tax, the fringe benefit tax and the banking cash transaction tax, grew by 50.06% to Rs 77,380 crore.The minister claimed growth in collection was due to various measures of the finance ministry, which were taxpayer-friendly and had encouraged the people to pay up.Tax authorities are expected to push the trend in the next fiscal with more taxpayer-friendly measures like e-filing introduced in this fiscal. "We will continue to be tax payer-friendly and will emphasise on voluntary collection," he said.As a stick for the tax evaders, the finance ministry will simultaneously try to increase its database of information on taxpayers. For this, the ministry is proposing to increase the sources of annual information returns.The finance minister plans to release the direct tax code, the omnibus review of tax laws, along with a discussion paper. "The code is ready as of yesterday," he said, adding that he was currently working on a draft discussion paper.The discussion paper would explain the reasons for writing the code and the rationale for these changes, he added – www.financialexpress.com