Tax-GDP ratio rises to 15-year high of 6.11% during FY23, shows data
- IBEF
- January 24, 2024
The share of direct taxes in gross domestic product (GDP) reached a 15-year high in FY23, accounting for 6.11%, per official data released on January 23, 2024. Direct tax collections outpaced economic growth in FY23, with a 17.79% increase compared to a 15.11% rise in nominal GDP. The data from the Central Board of Direct Taxes (CBDT) revealed that a year earlier, nominal GDP grew by 19.51%, but direct tax collections surged by an impressive 49.12%. Consequently, direct taxes expanded at a rate 2.52 times higher than the GDP growth rate in nominal terms.
During FY23, direct taxes saw a remarkable surge, increasing by 160.52% to reach US$ 200.1 billion (Rs. 16.64 trillion). This substantial growth marked a significant uptrend from US$ 76.7 billion (Rs 6.38 trillion) in FY14. Gross direct tax collections also witnessed a robust growth of over 173%, totaling US$ 237.2 billion (Rs 19.72 trillion) in FY23 compared to US$ 86.8 billion (Rs 7.22 trillion) in FY14.
Direct taxes contributed 54.62% to the overall tax collection during FY23, a slight increase from the previous year's 52.27%. However, this share was marginally lower than the 56.32% recorded in FY14. Central GST, a crucial component of goods and services tax (GST) collections on the Union government's books, experienced a 21.53% increase at US$ 86.3 billion (Rs 7.18 trillion), while Union excise duty collections declined by 18.37% to US$ 38.4 billion (Rs 3.19 trillion) in FY23 compared to the previous year.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
Partners
