The distortionary exemptions, concessions, weak enforcement, low compliance by taxpayers, reliance on indirect taxes and issues in improving tax administration have adversely affected the tax-to-GDP ratio. Economic Survey (2020-21) revealed that the tax-to-GDP ratio (federal taxes) fell to 9.6% in FY21 against 10.1% in FY20. It stated that to improve the tax-to-GDP ratio, the govt. is making all-out efforts to enhance tax collection through comprehensive tax reforms.
11/6/2021