New Delhi: Finance Minister P. Chidambaram Monday assured investors that the government would bring clarity in tax regulations and take necessary measures to ensure a stable tax regime.
“We will ensure that there is a stable tax regime and clarity in tax laws,” Chidambaram said at a media briefing here after addressing chief commissioners and director generals of income tax.
The finance minister said he had asked tax officials to adopt a “non-adversarial” approach to tax collection.
“I have asked chief commissioners to adopt non-adversarial approach to tax collection. I have told the CCITs (chief commissioners of income tax) to repeat this message to all commissioners, all assistant commissioners and deputy commissioners and ITOs (income tax officers),” he said.
Chidambaram hoped that the government would be able to meet Rs.5.7 lakh crore direct tax collection target in the current financial year.
“It is our intention to achieve the Rs.5,70,257 crore direct tax collection target for the current fiscal. We will be able to achieve the target,” he said.
The finance minister admitted that the collection from the direct taxes so far had been below target and said it is likely to pick up in the second half of the current fiscal.
“Collection is growing at 10.5 percent against the asking rate of 15 percent,” he said.
Chidambaram said lower-than-expected economic growth does not necessarily lead to low tax revenue, as there was no direct co-relation between the GDP growth and tax collection.
The government targets increasing the tax-to-GDP ratio to 12 percent from around 10 percent recorded in 2011-12.
The tax-to-GDP ratio declined to 10.1 percent in 2011-12 from 11.9 percent in 2007-08. “Our aim is to go back to 12 percent. Even at 12 percent India will be one of the lowest tax countries as proportion to tax to GDP,” he said.