Need to increase tax-GDP ratio by 1.5 percentage points: Jaitley

K.R. Srivats New Delhi | Updated on June 18, 2018

Union Finance Minister, Arun Jaitley. (file photo)

Increase must come from non-oil segment since there is scope for improvement

India needs to in the next few years replicate the last four years’ success and improve its tax-GDP ratio by another 1.5 percentage points, Finance Minister Arun Jaitley said on Monday.

The increase must come from the non-oil segment since there is scope for improvement, Jaitley said in a Facebook post, titled ‘The Economy and the Markets Reward Structural Reforms and Fiscal Prudence’.


Jaitley highlighted that the last four years have seen an improvement in Central Government’s tax-GDP ratio from 10 per cent to 11.5 per cent. There is an increase of 1.46 percentage points.

Almost half of this, 0.72 per cent of GDP, was accounted for by an increase in non-oil tax-GDP ratio. The level of non-oil taxes to GDP at 9.8 per cent in 2017-18 is the highest since 2007-08, a year in which India’s revenue position was boosted by buoyant international environment, Jaitley said.

“Despite higher compliances in new system, as far as the non-oil taxes are concerned, we are still far from being a tax compliant society. Salaried employees is one category of tax compliant assesses”, he said, adding that most other sections will have to improve their track record.

Published on June 18, 2018

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