"We found that the revenue foregone on account of tax exemption has increased by 111.8 per cent from Rs 65,587 crore in 2006-07 to Rs 1,38,921 crore in 2010-2011," the report for the year ended March 2011 by the Comptroller and Auditor General (CAG) said.
The main objective of any tax system is to raise revenues necessary to fund government expenditure, it said adding the amount of revenue raised is determined to a large extent by tax base and tax rates.
"The revenue forgone (on account of tax exemption) in respect of corporate taxpayers increased by 73.6 per cent as compared to 226.6 per cent in respect of non-corporate taxpayers during 2006-07 to 2010-11," the report tabled in Parliament said.
During last five years, it said, direct tax collections have increased from Rs 2,30,181 crore in 2006-07 to Rs 4,46,934 crore in 2010-11, at an average annual rate of growth of 23.6 per cent.
In case of corporate assessees, net collection increased from 1,44,318 crore in 2006-07 to Rs 2,98,687 crore in 2010-11, at an average annual growth rate of 26.7 per cent, it said.
The report said in the case of non-corporate assessees, net collection increased by 21.6 per cent from Rs 75,079 crore to 1,40,042 crore during the period under review.
The report also pointed out that there was a marginal growth in taxpayers during the five-year period.
"We observed that the assessee base grew over the last five years from 313.0 lakh taxpayers in 2006-07 to 335.8 lakh taxpayers in 2010-11, registering an increase of 7.3 per cent," it said.
The increase in tax collection was around thirteen times as compared to increase in the tax payers base, the report added. (MORE) PTI MDS TVS
