Direct Tax Collection in Negative Zone

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The tax department had managed to collect only Rs 7.3 lakh crore as of January 23.
This is more than 5.5% below the amount collected by the same point last year, said a senior tax official.

Officials typically garner about 30-35% of annual direct taxes in the final three months.
But despite their best efforts, direct tax collections this financial year were likely to fall below the Rs 11.5 lakh crore collected in 2018-19.
Thus the direct tax collections for this year could end up roughly 10% below fiscal 2019.
“Forget the target. This will be the first time that we’ll see a fall in direct tax collection ever,“ said a tax official in New Delhi.

MAIN REASONS BEHIND THIS DECLINE?

Developed in 1974 by economist Arthur Laffer.
It show the relationship between tax rates and the amount of tax revenue collected by governments.
Tax revenues change when the tax rate is either increased or decreased.
Inverted-U shape.