Centre's gross tax revenue up 34% to ₹27.07 lakh crore in FY22

Revenue secretary Tarun Bajaj on Friday said the Centre's gross tax revenue for 2021-22 has surpassed the revised estimate settling at ₹27.07 crore for the fiscal on the back of recovery in the economy. This accounts for a growth of 34% over a mop up of ₹20.27 lakh crore in FY21, and ₹20.10 lakh crore in the pre-Covid-19 period of 2019-20. The FY22 numbers are still provisional and are likely to be updated with an upside.

Addressing a press conference, revenue secretary Tarun Bajaj said gross tax collections soared to a record high of ₹27.07 lakh crore in FY22. "Mop-up from income tax, corporate taxes, customs and GST jumped, taking the tax-to-GDP ratio to the highest in 23 years," Bajaj added.

He also pointed out that the tax-to-GDP ratio of 11.7 percent in FY22 was one of the highest since 1999.

"The direct tax collection grew 49 percent in 2021-22 to ₹14.10 lakh crore from ₹9.45 lakh crore in 2020-21, said a presentation from the ministry of finance. The indirect tax collection registered a growth of 20% from ₹10.77 lakh crore to ₹12.90 lakh crore, according to the finance ministry presentation.

The tax collection has thereby registered a growth of 7.6% over the revised estimate of ₹25.16 lakh crore and 22% over the budget estimate of ₹22.17 lakh crore for 2021-22. Interestingly, the FY22 gross tax revenue mop has almost touched the FY 23 budget estimate of ₹27,57,820 crore.

"Revenue growth has been propelled by rapid economic recovery after successive waves of Covid, supported by one of the largest immunisation programme of the world run by the government," the finance ministry said in a release after the conference.

"It also signifies a robust recovery in the economy. These was also supplemented with better compliance efforts in taxation. Various efforts were taken by tax administration on direct as well indirect taxes to nudge higher compliance through use of technology and artificial intelligence," the release added.

On being asked whether the momentum in the tax collection will continue in the current financial year too, Bajaj expressed caution saying that to expect similar performance in the FY23 may not give a correct picture, as there are concerns on both excise and customs collection.

Central Board of Direct Taxes (CBDT) chairman JB Mohapatra said direct tax collection of ₹14.09 lakh crore till March 31 shows an outstanding year for income tax department. "If you look at 10-year period, if the trend line would have continued, we have reached not more than ₹12.50 lakh crore. But the reform measures of the previous years are now getting reflected in direct tax collection," Mohapatra added.