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Tax Collection Likely to Exceed FY22 BE

The government’s full year gross tax collections may exceed the FY 22 Budget Estimate of Rs. 22 lakh crores led by indirect taxes, with 25% of the target having come in the first quarter despite the impact of the second wave of Covid, ratings ICRA said Friday.

“Our calculations suggest that the FY 22 BE for gross tax revenues of Rs. 22.2 lakh crores can be achieved, even with a 5% contraction in the remainder of FY22, a which appears unlikely despite the lingering uncertainty on the growth front,” said Aditi Nayer, chief economist at ICRA. “In absolute terms, even if the gross tax inflows in the last three quarters of FY22 short three quarters of FY22 fall short of the level collected in July March FY21 by a considerable Rs. 95,000 crores, the budgetary target for FY22 will not missed,” she added.

Major tax revenue streams aggregated to Rs. 5.6 lakh crores for April-June FY22, more than double the provisional receipts in Q1FY21, indicating that the government may have leeway to reduce cresses on fuel to boost consumption sentiment and ease inflationary pressures. S-ET

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