RUN UP TO BUDGET: Government to meet FY16 tax target, Adhia

Weeks before Union Budget 2016, the government today said it will achieve the tax revenue target for the current year with larger-than- budgeted indirect tax collections making up for a possible shortfall in direct taxes.

The Finance Ministry on Wednesday said that government has mopped up Rs 10.66 lakh crore till January 30 by way of tax collections. This include Rs 5.22 lakh crore from direct taxes and another Rs 5.44 lakh crore via indirect taxes, said Revenue Secretary Hasmukh Adhia in a YouTube message.

Of the Rs 14.49 lakh crore tax revenue target, Rs 7.97 lakh crore was estimated to come from direct taxes (corporate and income tax) and another Rs 6.47 lakh crore from indirect taxes (customs, excise and service tax).

Government is facing fiscal constraints due to higher outgo on account of short-fall in divestments targets not being met due to commodity meltdown; additional expenses for Chennai floods; drought packages etc. With indirect collections rising, owing to higher excise duties on petroleum products, the government is confident of meeting its overall tax collection targets for 2015-16 despite a shortfall in direct tax collection.

According to Revenue Secretary, "government sees a small shortfall coming up in direct tax collection estimates for the fiscal as only 65 per cent of the annual target has been achieved in direct tax collections. But, this would be put in place by indirect tax collections, wherein, the government has already achieved 88 per cent of the target till January 30 . So, we expect another Rs 40,000 crore to come from indirect taxes, which will make good in the shortfall in direct taxes,” he explained.

On the whole, we are optimistic of close to 100 per cent achievement of overall tax revenue target of the year," Revenue Secretary Hasmukh Adhia tweeted.  Among various segments, banking and financial services yielded substantial tax receipts for the government kitty.

For government to adhere to its fiscal targets this is a positive news, as recently there has been lot of talks around whether the government can adhere to the fiscal discipline in order to achieve a 3.9 per cent target. Going into the budget, targets for the next fiscal will be keenly watched by the experts.