Estimating Average Effective Tax Rates: Evidence from Firm-level Data in India
Material type:
TextPublication details: Economic and Political Weekly; 2024Description: 65-72Subject(s): Online resources: Summary: The average effective tax rates for labour and capital income for India are estimated using a novel approach with the help of India KLEMS and CMIE Prowess database. The estimates suggest that AETR on both labour and capital incomes have improved since 2013, indicating a broadening of the tax base and formalisation of economic activities. Improvement in AETR on capital income was driven by improved tax coverage on industrial activities, while that of the service sector remained stable. There could be some scope for improving aggregate tax revenue by reallocating taxes on capital income between activities and raising taxation of capital income in general to some extent.
| Item type | Current library | Call number | Vol info | Status | Date due | Barcode | |
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Article Index
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Dr VKRV Rao Library | Vol. 59, No. 26-27 | Not for loan | AI349 |
The average effective tax rates for labour and capital income for India are estimated using a novel approach with the help of India KLEMS and CMIE Prowess database. The estimates suggest that AETR on both labour and capital incomes have improved since 2013, indicating a broadening of the tax base and formalisation of economic activities. Improvement in AETR on capital income was driven by improved tax coverage on industrial activities, while that of the service sector remained stable. There could be some scope for improving aggregate tax revenue by reallocating taxes on capital income between activities and raising taxation of capital income in general to some extent.
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