Tax-GDP ratio to improve post GST, note ban: Finmin TAX BUOYANCY

The gross tax-GDP ratio in 2017-18 is estimated to be around 11.3 per cent post implementation of GST and demonetisation

Notably, these reform measures have brought an additional 1 crore people into the tax net

The new indirect tax regime is likely to boost GDP by around 2 per cent going ahead

The implementation of GST and increased surveillance post demonetisation will help increase the tax-GDP ratio to 11.9 per cent by 201920, government said Thursday. The gross tax-GDP ratio in 2017-18 is estimated to be around 11.3 per cent. In the Medium Term Expenditure Framework Statement, tabled in the Lok Sabha, the finance ministry has projected that in the medium term tax revenues will show the growth anticipated during the presentation of the Budget.

"In other words, it is felt that any shocks to tax collections due to the introduction of GST will be absorbed in the current financial year and hence the taxGDP ratio will remain at the

level of 2016-17," it said. The government has budgeted for over Rs 19.06 lakh crore from taxes in the current fiscal, a growth of about 15 per cent over the last fiscal. As per the statement, going forward "in the years 201819 and 2019-20 the gains from expansion of the tax base due to the introduction of GST and the increased surveillance post demonetisation will ensure that taxGDP ratio will increase by 30 basis points". The taxGDP ratios are projected to be 11.6 per cent in 2018-19 and 11.9 per cent in 2019-20 respectively, it said.

Goods and Services Tax (GST) was rolled out from July 1 and it is estimated that the new indirect tax regime would add to revenues and boost GDP by about 2 per cent.