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Friday, Aug 15, 2008
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Raids buoy up revenue receipts

Special Correspondent

Isaac says State to use the windfall as Onam gift for the poor

Finance Minister T.M. Thomas Isaac says State will recover from its financial difficulties soon.

THIRUVANANTHAPURAM: Enthused by the results of a two-week drive against tax evasion, Finance Minister T.M. Thomas Isaac, on Thursday, predicted that the State would recover from all its financial difficulties faster than he had expected.

Only 200 merchants had come under the scanner of the Finance Vigilance Wing during the drive that began two weeks ago. These few merchants were found having evaded tax amounting to Rs.5.29 crore. The Vigilance squads slapped on them claims totalling Rs.15.87 crore towards tax and penalty.

At a press conference, Dr. Isaac said the indirect impact of the drive had been stupendous. While income from commercial taxes came to Rs.650.91 crore during the whole of August last year, a sum of Rs.649.25 crore flowed into the coffers of the government during the first 13 days of this August. He said he expected at least a 50 per cent increase in tax receipts when comparing the two months.

The government would use this revenue windfall as an “Onam gift for the poor, the aged and the destitute,” he said.

Welfare pensions

The State budget this year had promised increasing all welfare pensions from Rs.120 to Rs.200 a month.

All welfare pensioners would receive the entire backlog of their pensions before Onam. This would require Rs.180 crore. The benefits would reach the hands of 15.6 lakh people, Dr. Isaac said.

He said Kerala was the State with the highest tax evasion rate. Tax revenue came to 9.5 per cent of the State Gross Domestic Product (SGDP) here against an all-India average of 11 per cent. The ratio would fall a lot more if foreign remittances used for consumer spending too were taken into the SGDP account.

It should have actually been a few notches above the all-India average in Kerala, he said.

The VAT Council (which periodically reviews issues related to the Value Added Tax regime) is to meet here on August 21.

Dr. Isaac said he would place the evidences gathered during the tax raids before the merchants’ representatives then.

“Tax buoyancy has to be in tune with trade growth. There is no compromise on that,” he said.

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