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    L3 Fiscal Trends Taxation in India

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    Chandan K Singh
    This document discusses fiscal trends in India related to taxation revenues. It analyzes the evolution of India's tax structure from indirect to direct taxes. Various charts and data tables are presented showing tax revenues as a percentage of GDP over time, with direct tax revenues increasing and accounting for a larger share of total tax revenues compared to indirect taxes. The document also examines concepts of tax buoyancy and elasticity in India and reforms to the country's direct and indirect tax systems.

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    L3 Fiscal Trends Taxation in India

    Uploaded by

    Chandan K Singh
    28 views16 pages
    This document discusses fiscal trends in India related to taxation revenues. It analyzes the evolution of India's tax structure from indirect to direct taxes. Various charts and data tables are presented showing tax revenues as a percentage of GDP over time, with direct tax revenues increasing and accounting for a larger share of total tax revenues compared to indirect taxes. The document also examines concepts of tax buoyancy and elasticity in India and reforms to the country's direct and indirect tax systems.

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    This document discusses fiscal trends in India related to taxation revenues. It analyzes the evolution of India's tax structure from indirect to direct taxes. Various charts and data tables are presented showing tax revenues as a percentage of GDP over time, with direct tax revenues increasing and accounting for a larger share of total tax revenues compared to indirect taxes. The document also examines concepts of tax buoyancy and elasticity in India and reforms to the country's direct and indirect tax systems.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    28 views16 pages

    L3 Fiscal Trends Taxation in India

    Uploaded by

    Chandan K Singh
    This document discusses fiscal trends in India related to taxation revenues. It analyzes the evolution of India's tax structure from indirect to direct taxes. Various charts and data tables are presented showing tax revenues as a percentage of GDP over time, with direct tax revenues increasing and accounting for a larger share of total tax revenues compared to indirect taxes. The document also examines concepts of tax buoyancy and elasticity in India and reforms to the country's direct and indirect tax systems.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    of 16

    Fiscal Trends in India: Tax

    Revenues
    L3 Indian Public Finance

    1
    Taxation in India
    • Evolution of India’s tax structure
    • Tax buoyancy and elasticity
    • Progressivity of taxes
    • Tax reforms in India: reforms of direct taxes
    • Reforms of indirect taxes: Move to wards GST
    • Tax expenditures in India

    2
    Structure of Taxation
    • Evolution of Tax Structure
    • From Indirect to direct taxes
    • From import duties to domestic indirect
    taxes
    • Stylized facts: Hinrichs

    3
    Federal Systems
    • Issues of Vertical Externality
    • Issues of Inter-jurisdictional tax competition

    4
    0.7
    0.6
    0.5
    0.4
    0.3
    0.2
    0.1
    0
    1 2 3 4

    Traditional direct taxes Trade taxe


    Domestic indirect taxes Direct taxes on incomes

    5
    80.00

    70.00

    60.00

    50.00

    40.00

    30.00

    20.00

    10.00

    0.00

    Traditional direct taxes


    Customs
    Domestic indirect taxes
    Income and corporate income taxes
    6
    Combined Tax Revenues (%)
      DTR/GDP IDTR/GDP TR/GDP
    1950-51 2.291 3.927 6.217
    1951-52 2.276 4.617 6.892
    1952-53 2.395 4.049 6.444
    1953-54 2.113 3.755 5.868
    1954-55 2.215 4.431 6.646
    1955-56 2.348 4.615 6.963
    1956-57 2.192 4.581 6.773
    1957-58 2.416 5.304 7.720
    1958-59 2.280 4.938 7.219
    1959-60 2.378 5.272 7.650
    1960-61 2.309 5.446 7.755
    1961-62 2.434 5.931 8.365
    1962-63 2.824 6.582 9.406
    1963-64 3.043 7.166 10.209
    1964-65 2.797 6.987 9.784
    1965-66 2.620 7.810 10.430
    1966-67 2.419 7.865 10.283
    1967-68 2.101 7.207 9.307
    1968-69 2.136 7.423 9.559
    1969-70 2.224 7.476 9.700

    7
      DTR/GDP IDTR/GDP TR/GDP
    1970-71 2.182 8.093 10.275
    1971-72 2.365 8.893 11.257
    1972-73 2.466 9.324 11.790
    1973-74 2.336 8.787 11.123
    1974-75 2.339 9.422 11.760
    1975-76 2.960 10.317 13.277
    1976-77 2.848 10.740 13.589
    1977-78 2.607 10.270 12.877
    1978-79 2.560 11.383 13.943
    1979-80 2.534 11.941 14.476
    1980-81 2.248 11.403 13.651
    1981-82 2.420 11.715 14.134
    1982-83 2.351 11.907 14.258
    1983-84 2.206 11.964 14.169
    1984-85 2.138 12.229 14.368
    1985-86 2.222 13.157 15.379
    1986-87 2.188 13.547 15.736
    1987-88 2.091 13.831 15.922
    1988-89 2.298 13.466 15.764
    1989-90 2.289 13.642 15.931

    8
      DTR/GDP IDTR/GDP TR/GDP
    1990-91 2.152 13.248 15.400
    1991-92 2.544 13.218 15.762
    1992-93 2.576 12.594 15.170
    1993-94 2.508 11.579 14.086
    1994-95 2.843 11.712 14.555
    1995-96 3.002 11.703 14.705
    1996-97 2.978 11.605 14.584
    1997-98 3.309 11.140 14.449
    1998-99 2.805 10.501 13.306
    1999-00 3.118 10.949 14.066
    2000-01 3.413 11.109 14.523
    2001-02 3.205 10.584 13.789
    2002-03 3.554 10.940 14.494
    2003-04 3.961 11.012 14.973
    2004-05 4.385 11.427 15.812
    2005-06 4.838 11.790 16.628
    2006-07 5.133 11.731 16.864

    9
    20.0

    18.0

    16.0

    14.0

    12.0
    10.0

    8.0

    6.0

    4.0

    2.0

    0.0

    DTR/GDP IDTR/GDP TR/GDP

    10
    100.00
    90.00
    80.00
    70.00
    60.00
    50.00
    40.00
    30.00
    20.00
    10.00
    0.00

    Share of direct taxes Share of indirect taxes

    11
    90.00

    80.00

    70.00

    60.00

    50.00

    40.00

    30.00

    20.00

    10.00

    0.00

    Centre: Share of Direct Taxes Share of Indirect Taxes

    12
    120.00

    100.00

    80.00

    60.00

    40.00

    20.00

    0.00

    States: Share of Direct Taxes Share of Indirect Taxes

    13
    Measuring Buoyancy and Elasticity
    • Buoyancy: percentage change in tax
    revenue/percentage change in tax base (often
    proxied by GDPmp)
    • Buoyancy over a period of time measured by
    fitting a double log equation with tax revenue as
    dependent variable and tax base as the
    independent variables.
    • Tax base can be decomposed between real and
    price components.
    14
    7.000

    6.000
    5.000

    4.000

    3.000
    2.000

    1.000

    0.000
    -1.000

    -2.000

    b(TTR)

    15
    8.000
    7.000
    6.000
    5.000
    4.000
    3.000
    2.000
    1.000
    0.000
    -1.000
    -2.000
    -3.000

    b(CT RG) b(ST ROWN)

    16

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