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Tax-GDP ratio to increase 30 bps for next two fiscals: Report

The tax-GDP ratios are projected to be 11.6% of GDP in 2018-19 and 11.9% of GDP in 2019-20

IANS  |  New Delhi 

GDP, growth
Any shocks to tax collections due to the introduction of GST will be absorbed in the current FY

The tax-ratio will see an increase of 30 basis points (bps) each in 2018-19 and 2019-20 due to the impact of and the roll-out of the Goods and Services (GST), according to the Medium-Term Expenditure Framework (MTEF) Statement tabled in the on Thursday.

"Going forward in the years 2018-19 and 2019-20, the gains from the expansion of the base due to the introduction of and the increased surveillance post-demonetisation will ensure that tax-ratio will increase by 30 bps in each of these fiscals," the report said.

The tax-ratios are projected to be 11.6 per cent of in 2018-19 and 11.9 per cent of in 2019-20.

However, in the current fiscal, the tax-ratio is expected to see no increase over that of 2016-17 and remain at 11.3 per cent, the report noted.

"In other words, it is felt that any shocks to collections due to the introduction of will be absorbed in the current FY and, hence, the tax-ratio will remain at the level of 2016-17," it said.

"It is projected that, in the medium-term, revenues will show the growth anticipated during the presentation of the Budget and as estimated in the MTEF Statement," it said.

First Published: Thu, August 10 2017. 17:08 IST