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India doesn’t collect more taxes than its peers. The Budget is reported to be exploring plans to ease the tax burden on individuals. A cross-country comparison shows India’s taxes are not unusually high (Chart 1).
Income-tax collections are higher than at any point on record going back to at least 1979-80. These taxes, primarily paid by individuals, were equivalent to 3.35 per cent of gross domestic product (GDP) in 2023-24. This is higher than corporation tax, which was 3.12 per cent, aided by a 2019 government move lowering rates to encourage investment (Chart 2).
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