Kerala
tax revenue up 25%, VAT collection exceeds national
average
The
tax revenue of Kerala is growing at a robust rate of 25%
per annum with VAT collection exceeding the national
average for the last two years, state finance minister
Thomas Isaac, said. Efficient treasury management is set
to bring down the humongous revenue deficit of the state
to zero by 2010, he said in an interaction with
reporters here on Tuesday.
Isaac
disclosed that the state is working towards online tax
administration by computerising all points to increase
compliance. Computerisation of border check posts would
be speeded up and cross verification of the online data
would unearth tax evasion, he said.
The
ratio of tax revenue to SDP (State Domestic Product) is
also likely to increase to 16% from the present 13.5%.
The ratio of revenue expenditure to SDP would be brought
down to 17% by 2010 from the present 19.5%, Isaac said.
The
VAT collection of the state has grown at a hefty rate of
55% for the FY 2006-07 compared to the previous year.
From Rs 2,950 crore in 2005-06, the VAT has increased to
Rs 4,500 crore, he said and added that for 2007-08 the
state estimates the collection to exceed Rs 6,500 crore.
Isaac expects the VAT revenue to be buoyant for a couple
of years and said that the state would take efforts to
bring more traders into the tax net. Excise tax and
stamp duty have also increased commendably compared to
the previous years. The finance minister was in favour
of reducing the stamp duty to increase compliance.
He
expects the prudent fiscal management to give more
leverage to the state in development funding. The limit
imposed by the Union government on the state for public
borrowing constrained the states, he said. Borrowals
from multilateral institutions are often tied,
restricting the government spending to a single project
and reducing the flexibility, he added. The proposal of
the Union government to draft a Bill on micro-finance
and the intention of funding the panchayats directly
under Centrally sponsored schemes works against the
ideals of federalism, he alleged.
