Govt may go bullish on loan waiver tax effort

Govt may go bullish on loan waiver tax effort

Faced with the daunting task of mobilising resources for the much-discussed farm loan waiver, the state government is learnt to have directed four major revenue-earning departments to pull up their socks and intensify tax collection effort.

The Kumaraswamy-led government, which is looking to raise a whopping Rs 30,000 crore for the loan waiver, is seriously considering revising the tax collection targets of Commercial Taxes, Excise, Stamps & Registration and Transport (motor vehicle tax) departments. In his February 2018 (vote on account) budget, the then chief minister Siddaramaiah had set a total of Rs 1.01 lakh crore as the revenue collection target for these four departments. The highest among them is Commercial Taxes at Rs 65,800 crore, followed by Excise (Rs 18,750 crore), Stamps & Registration (Rs 10,400 crore) and Transport (Rs 6,600 crore).

Kumaraswamy, who recently reviewed the performance of these departments, hopes to rake in an additional Rs 3000-3500 crore from these departments by improving efficiency in tax collection. Besides, heads of these departments have been directed to take measures to plug revenue leakage and focus on recovering long-pending tax arrears.

However, official sources in these departments expressed fear that revising tax collection targets further could make them unrealistic. Kumaraswamy, who holds the Finance portfolio, is scheduled to present the budget for the remaining part of the current financial year on July 5.

With revenue surplus position estimated to hit an all-time low of Rs 127 crore in the current fiscal, Kumaraswamy is exploring ways to increasing revenue. This is over and above cutting down “avoidable” and “unnecessary” expenditure in both plan and non-plan components.

Speculation is rife in the government that the chief minister may follow the footsteps of his predecessor Jagadish Shettar and resort to additional resource mobilisation measures. Shettar, in his 2013-14 budget, increased Value-Added Tax by 0.5% to 14.5% for a period of one year to finance a crop loan waiver, the government had announced during the severe drought.

The government may also explore taking a bold decision on revising service/user charges, fees, fines and other such non-tax revenue, whose rates have not been changed for many years.

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