Trust-based taxation system is enhancing collections, says Finance Minister

25 Jul 2022 , 09:02 AM

The government’s trust-based taxes system, according to finance minister Nirmala Sitharaman, has enhanced collections and increased the number of return files.

The finance minister expressed hope that the trend will continue in the upcoming fiscal year in her statement on the 163rd Income Tax Day, praising the department for collecting the most income ever–more than Rs14 lakh crore–during the previous fiscal year.

Due to a significant increase in mop-up from individual and company taxes, direct tax collections increased to Rs14.09 lakh crore in 2021—22, representing a year—over—year growth of 49.02 %.

The government expects to collect Rs14.20 lakh crore in direct taxes during the current fiscal year. The finance minister said that in order to promote ease of living and ease of doing business, the administration has addressed a number of legacy concerns and eliminated structural shortcomings relating to direct taxation.

A trust-based tax system is now guaranteed thanks to the reforms the administration implemented recently. The trend of increased tax collections and the rise in the quantity of income tax returns submitted, she claimed, “have the taxpayers on their part validated this trust-based strategy.”

She said that on the administrative side, technology has been effectively used to improve taxpayer services, reduce decision-making discretion, and increase the openness, equity, and speed of departmental operations.

It is important to commend the Income Tax Department for successfully implementing the reforms that have been made over the last several years and for successfully reorienting itself as a taxpayer-centric organization, the speaker added.