Finance Minister Pranab Mukherjee has asked income tax officials to strive hard to achieve the collection target for the financial year 2011-12 that may be difficult due to slowing economy. “International economic situation is not very conducive and highly uncertain… The targets are very steep and challenging,” Mukherjee said at the annual conference of senior income tax officials here.
The direct taxes collection target is pegged at .`5.33 lakh crore for 2011-12, a 20% growth over the actual collections of previous financial year. The Central Board of Direct Taxes, the apex direct taxes body, had set the internal gross tax target even higher at .`6.37 lakh crore. Tax collection targets are usually difficult to meet in a downturn. Mukherjee said high international prices of commodity and energy, especially fossil fuels, have fuelled inflation and could adversely impact the GDP growth.
But he was confident that the government will keep its commitment of fiscal deficit target of 4.6% of GDP. “The government is committed to fiscal consolidation roadmap,” Mukherjee said adding that a large fiscal deficit will not help the economy. Revenue secretary Sunil Mitra also sounded a note of caution saying that high inflation and slowing economy could have impact on revenue collections. He also warned against any cut in duties on crude, petrol and diesel
as the move could severely impact revenue collections and thereby make fiscal deficit target difficult to achieve.
Reserve Bank of India governor D Subbarao had said last week that it would be difficult to meet the fiscal deficit target of 4.6% in 2011-12 unless adjustments for the rise in fuel and fertiliser prices is made. Mukherjee also asked the income tax department to focus on preventive vigilance and adopt a strategy for “zero tolerance for corruption”. He said the tax department was engaged in many ways to tackle the menace of black money.
Mukherjee said a specialised wing – Directorate of Criminal Investigation – is being created under the income tax department to deal with tax crimes related to illegal anti national activities and would help double the ongoing efforts of the Department in dealing with issues of black money.