Direct tax collections must increase, says Pranab

Direct tax collections are not enough and the government is targeting revenue worth 12 per cent of the national gross domestic product from such taxes, finance minister Pranab Mukherjee said in Kolkata on Sunday.

"Direct taxes are the most efficient and non-inflationary, but they do not have their due share in the GDP. The share of direct taxes in the tax basket has been substantial; but my desire is to see them reach 12 per cent of our GDP sooner rather than later," Mukherjee said.

Inaugurating his home state West Bengal's first Aayakar Seva Kendra (ASK) - a single-window help centre for tax payers - Mukherjee said, "In FY12, we managed to realise direct tax revenues of around Rs5 lakh crore; and I have set a target of Rs5.7 lakh crore by FY13."

Direct tax mop-up has grown to Rs4.93 lakh crore in 2011-12 from Rs1.33 lakh crore in 2004-05, at a compounded rate of 20.58 per cent. The share of direct taxes in the GDP has increased to 9.47 per cent in 2011-12 from 4.1 per cent in 2004-05 and is expected to go up to 10.18 per cent in this financial year, he said.

With the direct taxes code to be implemented from April 2013, its share as a percentage of GDP will go up further. ''I'll meet the chief commissioners [of the income tax department] in the later part of June to discuss how tax collections can be increased in this fiscal,'' Mukherjee said.

He said the ministry was in talks with the Central Board of Direct Taxes and the Central Board of Excise and Customs on cadre restructuring.