The net direct tax kitty refers to the total amount of direct taxes collected by the government. The increase in this kitty can be attributed to several factors:
- Economic growth: A growing economy leads to increased incomes and profits, resulting in higher tax collections.
- Tax policy changes: The government may introduce new tax reforms or increase tax rates, leading to a higher collection of direct taxes.
- Compliance and enforcement: Improved tax administration and stricter enforcement measures can lead to better compliance by taxpayers and higher tax collections.
- Expanded tax base: Efforts to widen the tax base by bringing more individuals and businesses into the tax net contribute to an increase in the direct tax kitty.
- Reduction in tax evasion: Measures to curb tax evasion, such as the implementation of technology-driven systems and data analytics, can result in higher tax collections.
- Retrospective taxation: In some cases, the government may enact retrospective tax legislation, which can result in a one-time increase in the net direct tax kitty.
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