Goa : Tax and Economic Reforms
The economic Liberalization-2/”>Liberalization in India , initiated in 1991, with principles of Liberalization , Privatization and Globalization/”>Globalization-3/”>Globalization (LPG) of the country’s economic policies, with the goal of making the economy more market and service-oriented and expanding the role of private and foreign Investment. Specific changes include a reduction in import tariffs, deregulation of markets, reduction of taxes, and greater foreign investment. Liberalization has been credited by its proponents for the high economic Growth recorded by the country in the 1990s and 2000s. And it has positive impact on the state of Bihar as can be visibly seen from various sectors.
India’s GDP has increased thereafter and also the GSDP of state has increased many folds. The GSDP at constant (2011-12) prices for the year 2015-16 (Quick Estimates) is estimated at above 37,520 crore as against 34611 crore in the year 2014-15 (Provisional- Estimates) thereby reflecting a growth of 8.41 percent as against 9.64% in 2014-15.
agriculture Sector
In recent years agriculture plays an important role for the economy. Three areas where there is need to focus to improve the productivity in the agriculture sector are embodied i e. Promotion of Inclusive Growth, enhancement in rural income and sustenance of Food Security. The transformation in agriculture as to be steered by raising productivity in agriculture, by investing in efficient Irrigation technologies, and efficient use of all input. Government aimed to double the farmers income by 2022. It must be done by focusing on potential crops like Cashew, Coconut, Mango and Paddy by increasing productivity. Various schemes are being implemented to improve the performance in agriculture.
To increase the productivity, the availability of water is the most important element in the agriculture. Irrigation is one of the critical input for improving productivity in agriculture. Various schemes are being implemented in the state to increase area under irrigation and also to improve existing irrigation system.
Economy of Goa is rapidly increasing because of accelerated industrial development. The main aim is to create sustainable EMPLOYMENT opportunities mainly to the local people of Goa. It also includes Environment friendly industrial development ensuring balanced growth of regions, a facilitative regime that explores and unleashes the energies of the private sector to create an environment in which existing and new industries can prosper.
Micro, Small & Medium Enterprises also plays an important part to increase the gross domestic product of the state. Government of India had enacted the Micro, Small, Medium Enterprises Development Act 2006 w.e.f 02/10/2016 and the industrial units were classified as Micro Small and Medium Enterprises (MSME) separately based on the investment in plant and machineries. It plays part by promoting industrial growth as well as by providing employment opportunities to vast number of people of Goa.
Tourism : It is one of the major service sector that has huge conribution to the economy of the Goa. Goa, a paradise of scenic charm, settled beautifully amidst seas and lush greeneries, is a dream destination of millions of travellers across the globe. The glistening sands, exotic beaches, the architectural splendors of its temples, churches, old houses and rich culture has become a popular global leisure destination which attracts domestic & foreign tourists from all over the globe.
Goa has an ideal tourist destination. Several initiatives and tourism Infrastructure-2/”>INFRASTRUCTURE projects were undertaken to augment the carrying capacity of the State.
Tax (Revenue and Expenditure)
There was revenue surplus of 158.82 crore in 2016-17. The Revenue Receipts for the current year were estimated at 9,361.96 crore and the Revenue Expenditure was estimated 9,203.14 crore.
The total receipts (Revenue + Capital) were estimated to 11,853.51crore (B.E) for the year 2016-17, comprising of revenue receipts of 9,361.96 crore (B.E) and capital receipts of 2,491.55 crore (B.E). The total receipts estimated for the year 2016-17 is 16.60 percent less than the Revised Estimates of 2015-16.
The total expenditure (Revenue + Capital) estimated for the year 2016-17 is 13,111.19 crore (B.E), comprising of revenue expenditure of 9,203.14 crore (B.E) and Capital Expenditure of 3,908.05 crore (B.E).
Receipts and Expenditure
Receipts can be broadly divided into Revenue Receipts and Capital Receipts.
Revenue Receipts of the State comprise of Share in central Taxes, Grants–in-aid from Central Government, State’s Own Tax Revenue and State’s Own Non tax revenue.
- i) Share in Central Taxes
The Share in the central Taxes comprises of Corporation Tax, Taxes on Income other than Corporation Tax, Taxes on Wealth, Customs, Union and Service Tax. The state has received 1072.87 crores from central Government as State share in Central Taxes and Grant-in-Aid representing about 15% of our Budget. Since 2015-16, there has been more than three-fold increase in the Central transfer to the State, pursuant to the recommendation of the Fourteenth Finance Commission
- ii) State’s Own Tax Revenue
The State Own tax Revenue comprises of Sales Tax (V.A.T), State Excise, Stamp Duty, Registration fees, Motor Vehicles, etc. The State has recorded an increase of 1,976.70 Crore during the period 2012-13 to 2016-17 (B.E) registering an annual compound growth rate of 13.72%.
iii) State’s Own Non Tax Revenue
Revenue from Power and water Supply are the major sources of non tax revenue of the State. It has been seen that non tax revenue collection has shown a decrease in the year 2015-16 (R.E) by 114.40 crore as compared to the previous year, however, during the year 2016-17(B.E) there has been seen an increase of 402.39 crore.
- iv) Grants–in-aid from Central Government
The central government provides grant in aid to the State Government for the implementation various schemes. Funds received from the central government are not a loan, and hence does not have to be repaid.
Revenue Expenditure
Revenue Expenditure can be classified into Plan and Non-Plan expenditure. The annual compound growth rate of revenue expenditure works out to be 16.63 % during the period 2012-13 to 2016-17 (B.E).
Capital Receipts
Capital receipts are broadly classified into four major groups i.e internal debt, loans and advances from central government, non-debt capital receipts and public account – net (i.e. receipts from public account minus expenditure under public account).
Capital Expenditure
Expenditure incurred under Plan for development works and debt repayment constitute around 99 percent of the capital expenditure incurred by the State. The capital expenditure is showing an increasing trend. Capital expenditure which was 1,285.11 crore during 2012-13 increased to 1,804.39 crore during 2014 -15 and further to ` 3,354.46 crore during 2015-16 (RE).
During the years 2012-13 & 2013-14, revenue deficit to the tune of (-) 215.92 crore and (-) 353.51 crore was observed in the State. However, the situation improved during the year 2014-15 where the State experienced revenue surplus of 278.44 crore. The Revenue deficit amounting to (-) 137.09 reoccurred during 2015-16 (RE). The Revenue Surplus for the year 2016-17 (BE) is expected to be 158.82 crore.
Fiscal Deficit of the State shows an increasing trend. Fiscal Deficit which stood at (-) 1,137.36 crore in 2012 – 13 increased to (-) 1,369.87 crore in 2013 -14.
Primary Deficit stood at (-) 336.65 crore during 2012-13 increased to (-) 479.21 crore during 2013-14. It is interesting to note that Primary surplus was observed in the State during 2014-15 amounting to 58.92 crore.
Different Types of Taxes
Nearly 70% of the revenue comes from Commercial Taxes. Commercial Taxes comprise of VAT, CST, entertainment Tax, luxury Tax, Green Cess and Non-Biodegradable. Revenue from Excise had decreased drastically from 315.31 crore to 221.80 crore (up to Jan 2017).
It is also observed that department of Mines has earned a revenue of 219.20 crore for the year 2016-17 (upto January’17) as compared to 216.30 crore of the previous year. The share of revenue earned from Notary Services has also declined from 171.32 during 2015-16 to 108.83 during 2016-17.
Goods and Service Tax
Government of India passed the act for the indirect taxes. In this tax, many indirect taxes has been subsumed in the GST. The State has actively participated in all GST Council meetings in order to present the views of the State in an effective manner on all issues concerning proposed laws, rules, processes and systems for GST.
The model GST law has been drafted and discussed in GST Council. The GST Council has also decided the bands of tax rates for GST. It has constituted a Committee to study individual goods and feed them into the category of tax rates. Cross Empowerment is being provided in the Acts so as to avoid dual authority over tax payers. The State authorities will be empowered to administer the CGST and IGST Act and so also the Central Authorities would be empowered to administer SGST Act. The calculation of revenue base of States and the formula for compensation on account of loss have been decided. The threshold limit for registration and the compounding limits have also been agreed upon. Consensus on these issues will pave the way for introduction of GST between July to September, 2017.
A number of benefits are expected to accrue not only to the Central & State Government but also to the consumers, business & Industry in the ensuing GST regime. Under the GST model, all the Central and State Government taxes will be merged into a single tax, which will reduce cascading or the double Taxation effect.
Impact of GST in state
The Department of Commercial Taxes is fully prepared to migrate over to the GST regime. With the enactment of the State GST Act which I will bring before this House shortly, the State will be set to implement GST from the expected date.
Goa being more of a consuming State, wherein services play a major role in the State economy; it is anticipated that the State will gain. Any shortfall will be compensated by the Union.
Recent Tax proposals
Value Added Taxes
The registration, including its renewal, under VAT and other Commercial Taxes is for a period of three years. With the Goods & Services Tax (GST) expected to be rolled out by 01st July; the registration under VAT and other Commercial Taxes will not be valid for the dealers, other than petroleum products and liquor. To provide some relief to all such dealers, provision is provided to waive off the renewal fees as applicable.
To further promote green initiative, there is proposal to exempt VAT on sale of electric vehicles.
Excise
There is new proposal to levy an additional fee of 1,00,000/- to the manufacturer of high bouquet spirits who imports Concentrated Alcoholic Beverages, for the purpose of sales to other manufacturers; within or outside the State. An export fee of 10/- per bulk litre will be levied on the sale.
Registration of an old four wheeler, which is more than 15 years old, is cancelled. A new proposal to allow adjustment of the Road Tax paid on the old vehicle against registration of a new vehicle has been proposed.
Casino Fees
There is need to revise the fees for renewal of license, annual recurring fees and fees for transfer of license; for land based and off-shore casinos.
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Tax and Economic Reforms in Goa
Goa is a state in western India. It is located on the Arabian Sea coast, and is bordered by Maharashtra to the north, Karnataka to the east, and the Union Territory of Daman and Diu to the south. Goa has a Population of over 1.5 million people, and its capital is Panaji.
Goa was a Portuguese colony for over 450 years, from 1510 to 1961. During this time, The Portuguese introduced a number of taxes to Goa, including a land tax, a house tax, and a poll tax. These taxes were used to fund the Portuguese government in Goa, and to support the Portuguese military presence in the state.
After Goa gained independence from Portugal in 1961, the Indian government introduced a number of new taxes to Goa. These taxes included an Income tax, a sales tax, and a service tax. These taxes were used to fund the Indian government, and to support the development of Goa.
In recent years, the government of Goa has introduced a number of Tax Reforms. These reforms have been aimed at simplifying the tax system, and at making it more efficient. The government has also introduced a number of tax incentives, in order to attract investment to Goa.
History of Taxation in Goa
The history of taxation in Goa can be traced back to the Portuguese colonial period. The Portuguese introduced a number of taxes to Goa, including a land tax, a house tax, and a poll tax. These taxes were used to fund the Portuguese government in Goa, and to support the Portuguese military presence in the state.
After Goa gained independence from Portugal in 1961, the Indian government introduced a number of new taxes to Goa. These taxes included an income tax, a sales tax, and a service tax. These taxes were used to fund the Indian government, and to support the development of Goa.
In recent years, the government of Goa has introduced a number of tax reforms. These reforms have been aimed at simplifying the tax system, and at making it more efficient. The government has also introduced a number of tax incentives, in order to attract investment to Goa.
Current Tax System in Goa
The current tax system in Goa is based on the Indian tax system. The main taxes in Goa are:
- Income tax
- Sales tax
- Service tax
- Excise duty
- Custom Duty
The income tax is a Direct Tax that is levied on the income of individuals and companies. The sales tax is a Indirect Tax that is levied on the sale of goods and services. The service tax is an indirect tax that is levied on the provision of services. The excise duty is a tax that is levied on the manufacture of goods. The custom duty is a tax that is levied on the import and export of goods.
Tax Reforms in Goa
The government of Goa has introduced a number of tax reforms in recent years. These reforms have been aimed at simplifying the tax system, and at making it more efficient. The government has also introduced a number of tax incentives, in order to attract investment to Goa.
Some of the key tax reforms that have been introduced in Goa include:
- The introduction of a flat tax rate of 5% for individuals and companies.
- The introduction of a single-window system for tax registration and filing.
- The introduction of a number of tax incentives, including a capital investment subsidy, a research and development subsidy, and an Export Promotion subsidy.
Impact of Tax Reforms on Goa’s Economy
The tax reforms that have been introduced in Goa have had a positive impact on the state’s economy. The reforms have simplified the tax system, and have made it more efficient. The reforms have also attracted investment to Goa, and have helped to boost the state’s economy.
Some of the key benefits of the tax reforms include:
- Increased investment in Goa
- Increased economic activity in Goa
- Increased employment in Goa
- Increased tax revenue for the government of Goa
Conclusion
The tax reforms that have been introduced in Goa have had a positive impact on the state’s economy. The reforms have simplified the tax system, and have made it more efficient. The reforms have also attracted investment to Goa, and have helped to boost the state’s economy.
What are the key tax reforms proposed by the government?
The government has proposed a number of tax reforms, including:
- A reduction in the Corporate tax rate from 30% to 22%.
- A reduction in the personal income tax rate for individuals earning up to Rs. 5 lakhs.
- A new tax regime for businesses with turnover up to Rs. 40 lakhs, which will be simpler and less burdensome.
- A new tax regime for individuals with income up to Rs. 5 lakhs, which will be simpler and less burdensome.
What are the benefits of these tax reforms?
The tax reforms are expected to boost economic growth by making it easier for businesses to operate and by giving individuals more disposable income. The reforms are also expected to simplify the tax system and make it more efficient.
What are the challenges of implementing these tax reforms?
One of the challenges of implementing the tax reforms is that they will require a significant change in the way that businesses and individuals currently file their taxes. The government will need to provide adequate training and support to ensure that businesses and individuals are able to comply with the new rules.
Another challenge is that the tax reforms are likely to lead to a loss of revenue for the government. The government will need to find ways to offset this loss of revenue, such as by increasing taxes on other items or by cutting spending.
What are the potential unintended consequences of these tax reforms?
One potential unintended consequence of the tax reforms is that they could lead to a decrease in tax compliance. If businesses and individuals believe that the tax system is unfair or too complex, they may be less likely to comply with the rules.
Another potential unintended consequence is that the tax reforms could lead to an increase in inequality. If the tax reforms disproportionately benefit high-income individuals, it could widen the gap between the rich and the poor.
What are the next steps in implementing these tax reforms?
The government has released a draft of the tax reforms for public consultation. The government will consider the feedback received from the public before finalizing the reforms. The government is expected to implement the tax reforms in the next financial year.
Sure, here are some MCQs without mentioning the topic Goa : Tax and Economic Reforms:
-
Which of the following is not a type of tax?
(A) Income tax
(B) Sales tax
(C) Property tax
(D) Wealth tax -
Which of the following is not a government revenue?
(A) Taxes
(B) Borrowing
(C) Spending
(D) Investment -
Which of the following is not a government expenditure?
(A) Salaries and wages
(B) Interest payments
(C) Transfer Payments
(D) Subsidies -
Which of the following is not a macroeconomic objective?
(A) Economic growth
(B) Price stability
(C) Full employment
(D) Environmental protection -
Which of the following is not a microeconomic objective?
(A) Efficiency
(B) Equity
(C) Sustainability
(D) Competitiveness -
Which of the following is not a market failure?
(A) Externalities
(B) Public goods
(C) Monopoly power
(D) Asymmetric information -
Which of the following is not a government intervention?
(A) Regulation
(B) Taxation
(C) Spending
(D) Price controls -
Which of the following is not a Fiscal Policy tool?
(A) Taxes
(B) Spending
(C) Borrowing
(D) Monetary Policy -
Which of the following is not a monetary policy tool?
(A) Open market operations
(B) DISCOUNT rate
(C) Reserve requirements
(D) Exchange rate policy -
Which of the following is not a Trade Policy tool?
(A) Tariffs
(B) Quotas
(C) Subsidies
(D) Exchange rate policy
I hope these MCQs are helpful!