The
salient features of the Tax Forgone Statement issued by the Government are as
under:
- This Statement seeks to list the revenue impact of tax incentives or tax subsidies that are a part of the tax system of the Central Government.
- This Statement attempts to estimate some of the major tax expenditure under direct and indirect taxes.
- The estimates and projections are intended to indicate the potential revenue gain that would be realized by removing exemptions under direct and indirect taxes and similar measures.
- The amount of duty/taxes which could have been collected but for the exemptions issued in this regard.
The Revenue Foregone Statement is an estimate of tax expenditures arising out
of measures such as special tax rates, exemptions, deductions, rebates,
deferrals and credits which are an integral part of the tax policy of the
Government. Such exemptions are issued in public interest for fulfillment of
the various policy objectives, such as, protection of small scale sector,
industrial development of backward areas, encouragement of value addition,
regulation of prices of essential commodities, implementation of treaty
obligations and promotion of exports etc. These measures are collectively
called as ‘tax preferences’. They have an impact on Government revenues and
also reflect a significant policy of the Government. Such tax expenditures per
se are spending programs embedded in the tax statute which are manifestation of
the tax policy of the Government.
Exemptions are reviewed from time to time to assess their efficacy and remedial action is taken where necessary.
This was stated by Minister of State for Finance, Shri Namo Narain Meena, in written reply to a question in the Lok Sabha today.
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