Rs 278,644 crore foregone in 2007-08 due to exemptions
Govt would have raked in Rs 2,78,644 crore in 2007-08 as additional taxes had it not given any exemptions.
By PTI |
NEW DELHI: The government would have raked in a whopping Rs 2,78,644 crore in 2007-08 as additional taxes had it not given any exemptions, the Budget documents show.
In other words, revenue foregone as a percentage of aggregate tax collection in the current fiscal was 47.94, which is slightly less than the previous year's 50.89 per cent.
The maximum revenue foregone was on account of customs duty exemptions to the tune of Rs 1,48,252 crore, accounting for 22.51 per cent of the aggregate tax collections for the year.
Excise duty exemption was the next largest head for revenue sacrificed on account of various sops. These exemptions amounted to Rs 87,992 crore or 15.14 per cent.
"There is a lobby behind each tax exemption," Finance Minister P Chidambaram told a TV channel in his post-budget interview.
The government sacrificed Rs 58,655 crore by way of giving exemptions to corporate tax payers while sops for the personal income tax payers were worth Rs 42,161 crore.
Under different heads of revenue foregone, the Receipt Budget shows an amount of Rs 58,416 crore as concessions given for export promotions.
The main objective of any tax system is to raise revenues to fund government expenditures, a preface to the chapter on revenue foregone says, adding that the amount of revenue raised is determined by tax bases and tax rates. "It is also a function of a range of measures - special tax rates, exemptions, deductions, rebates, deferrals and credits - that affect the level and distribution of tax. These measures are sometimes called 'tax preferences'".
"Tax preferences may be viewed as subsidy payments to preferred tax payers," it says.
In other words, revenue foregone as a percentage of aggregate tax collection in the current fiscal was 47.94, which is slightly less than the previous year's 50.89 per cent.
The maximum revenue foregone was on account of customs duty exemptions to the tune of Rs 1,48,252 crore, accounting for 22.51 per cent of the aggregate tax collections for the year.
Excise duty exemption was the next largest head for revenue sacrificed on account of various sops. These exemptions amounted to Rs 87,992 crore or 15.14 per cent.
"There is a lobby behind each tax exemption," Finance Minister P Chidambaram told a TV channel in his post-budget interview.
The government sacrificed Rs 58,655 crore by way of giving exemptions to corporate tax payers while sops for the personal income tax payers were worth Rs 42,161 crore.
Under different heads of revenue foregone, the Receipt Budget shows an amount of Rs 58,416 crore as concessions given for export promotions.
The main objective of any tax system is to raise revenues to fund government expenditures, a preface to the chapter on revenue foregone says, adding that the amount of revenue raised is determined by tax bases and tax rates. "It is also a function of a range of measures - special tax rates, exemptions, deductions, rebates, deferrals and credits - that affect the level and distribution of tax. These measures are sometimes called 'tax preferences'".
"Tax preferences may be viewed as subsidy payments to preferred tax payers," it says.
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