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Tax-to-GDP:Trends, Efficiency, Compliance - SRIRAM's Insight



  Nov 28, 2023

The Tax-to-GDP Ratio Trend



Trend Over the Decade

The tax-to-GDP ratio, a key indicator of economic health, has shown an upward trend in recent years. This signifies the efficiency of tax collection and the broadening of the tax base, reflecting a robust fiscal environment.

Direct vs. Indirect Taxes

Direct tax collection has seen significant improvements, indicating a stronger direct tax-to-GDP ratio. However, indirect taxes, despite the implementation of GST, have shown fluctuations that suggest room for optimization.

Expansion of Tax Base

Efforts to expand the tax base have focused on streamlining tax administration and leveraging technology to enhance compliance, especially among high-earning professionals who have a lower rate of compliance.

Tax Reforms for Compliance

Strategic reforms are being implemented to reduce the compliance burden on honest taxpayers while tightening measures against tax evasion. The utilization of data analytics plays a critical role in identifying discrepancies and ensuring adherence to tax laws.

Future of Fiscal Policies

The trajectory of tax collection indicates a potential for even more robust fiscal health if reforms continue to emphasize ease of compliance and effective enforcement.

The focus on maintaining a healthy tax-to-GDP ratio is paramount for ensuring sustainable economic growth and providing quality public services.

SRIRAM’s


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