Tax evasion major reason for States financial crisis: Finance Minster

Thiruvananthapuram: Tax evasion is the main reason that caused financial crisis of the State, Finance Minister T .M. Thomas Isaac said in the Assembly on Wednesday.

In reply to a question from K. V. Abdul Khader (CPI-M), the Minister said that high rates of corruption, outdated technologies in Commercial Taxes Department and inefficiency in revenue collections led to revenue loss. Stays issued on tax collection resulted in mounting of arrears. Of the tax arrears of Rs. 12,906 crore, Rs. 76 crore was under dispute.

Dr. Isaac said that public debt of the State came to Rs. 155389 crore at the end of March 2016 as per report of the Comptroller and Auditor General of India. There was an increase of 97.51 per cent in public debt over the last five years.  

He added that the Government did not oppose Goods and Service Tax Bill proposed by the Central Government though it had certain concerns.

Dr. Isaac also listed 11 measures to check tax evasion. This includes strong measures to check corruption, encouraging consumer participation and modernisation of servers to increase revenue collection. More traders will be brought under tax bracket. Initiation of real time billing system and computerisation of check posts will be done. Measures will also be taken to settle appeals and disputes.

Scrutiny of tax returns and assessment of debt will be made more effective. Revenue and Registration departments will also take up strict measures to check tax evasion. Illegal liquor sale will be checked. Undervaluation of vehicles to evade tax will also be curbed. The Minister listed the measures in a written reply to a question raised by I .B. Satheesh (CPI-M).

“Welfare schemes and implementation of pay revision commission report by the previous Government also led to the financial crisis” Mr. Isaac said. He added that the State would attract large scale investment on the lines of Kochi Metro model, and proposals in this regard would be presented in this year’s Budget. There was Rs. 1009.3 crore in the treasury when the previous Government demitted office, but the immediate financial liability was of Rs. 965 crore, he said in reply to a question raised by M. K. Muneer (IUML).

Electricity Minister Kadakampally Surendran said that Government targeted electrification of all homes in the State by 2017. Environmental friendly energy sources would be promoted to increase electricity generation. Many mini hydroelectric projects are being also considered across the State, he said in response to the question raised by Mons Joseph (KCM).

Mr. Surendran replied to a question by K. Muraleedharan (INC) that a decision on the Athirappilly Project would be taken only in consideration the environmental impact of the project. Discussions would be held with Opposition before a decision is taken.