The decline in the tax-GDP ratio over the years and declining share of direct taxes in total tax revenue, suggest that the Central government should emphasize in the Union Budget 2022-23 on substantially improving the tax revenue, according to Primus Research.
The research note said that the policies regarding 'tax effort' could be designed through ways such as, rationalising tax rates, policies regarding widening tax base and net, and improving tax compliance and tax administration.
This process would have implications on ameliorating economic growth, deficit (in both the absolute term and as per cent to GDP) would come down.
The Budget for FY 2022 should continue to provide more support on the demand side than the supply side by reviving the informal sector and MSMEs, the research said.
(With inputs from IANS)
