Finance minister P Chidambaram on Wednesday told a Parliamentary panel that there is a lot of scope for improving tax compliance to boost revenues and that refunds have been lower this year compared to a year ago.
Describing the peak rate of taxation of 30% as moderate compared to that of various developed countries, the minister said, ?There is lot of scope for better tax compliance and tax collections.?
Chidambaram was speaking at the fifth meeting of the Parliamentary consultative committee attached to his ministry. He indicated that tax refunds were lower this year compared to last year. ?During last year, i.e., 2011-12, till this time, refund of R70,000 crore was made, which included arrears for the previous years, while, during the current year, i.e., 2012-13, refund of R57,000 crore has been made,? an official release said quoting the minister.
Gross direct tax receipts grew a modest 7.14% during the April-November period to R3,25,696 crore, while there has been a 15.04% jump in net direct tax receipts to R2,70,731 crore, indicating lower refunds during the period from a year ago. Net direct tax collected in the eight months of the fiscal is less than half of the budgeted target of R5.7 lakh crore.
He said there is a need for more taxpayers to electronically file their return as it well help in speedy tax refunds. Now, half of all the taxpayers file electronically. The minister also said that the government is fully committed to provide best possible facilities to the taxpayers for better tax compliance and revenue augmentation.
The committee members suggested that tax rates be kept low for better compliance. Some suggested that interest on refund may be paid at least at the bank rate of interest.
