Kerala which mostly survives on the service industry supported by huge remittances from expats in the Gulf hopes to attain a 20% growth in tax collections this year.
Finance Minister T M Thomas Isaac said strict measures would be taken to prevent tax evasion at all levels and to attain the target, and there would be zero-tolerance against corruption.
Though the state has recently been witnessing a spurt in investments with private participation in a wide range of projects from airports, seaports and metros to sports infrastructure, more than 80% of its revenue goes into salaries, pension and debt servicing.
The new government led by the Communist Party of India (Marxist) is also expected to shed its ideological baggage and promote large-scale private investments in infrastructure projects, including a high-speed rail corridor, as hinted at by Chief Minister Pinarayi Vijayan after a meeting with Prime Minister Narendra Modi in New Delhi recently.
Massive capital investments, if sustained, could help maintain tax buoyancy, though the government’s phased prohibition policy could be a dampener as liquor sales continue to be a major tax earner.
The CPM-led Left Democratic Front (LDF) government has vowed to increase tax collection after plugging leakages and enforcing strict vigil at checkpoints.
“We are looking at a 20% growth in tax collection in the current financial year (which ends on March 31),” Isaac told senior officials of the Commercial Taxes Department here yesterday.
“There has been a downtrend in tax collection in the previous years. The growth was 20% and 19% in 2011-12 and 2012-13 respectively. It came down to 12% in the last financial year.”
The twin combination of tax evasion and tardy follow-up of scrutiny and assessment has led to the drop in the collection, he said, adding the problem of corruption at border checkpoints has resurfaced.
The state government will revive the “corruption-free checkpoint mission” as part of its attempts to facilitate the functioning and prevent leakage in tax revenue. All the check posts will be modernised to improve efficiency.