Corporate taxes in Goa: An analysis

Abstract

Direct tax and indirect tax are the two categories of tax levied in the country by the Central government. Corporation tax is the highest contributor to the direct taxes in the country. This paper is an exploratory study on the corporation tax collected in the tiny state of Goa in comparison with the tax collected in India. Goa was selected for the study due to its peculiar feature of having the potential to be a model state in India, despite its size. Secondary data were collected and compiled from the Indian Economic Survey Reports, and the period of study is from 1999-2000 to 2010-11. The Income tax department commenced its operations in Goa from 1964 and by 1990-91, there were 743 corporate tax payers in the state. We found that the corporate tax growth in Goa was fluctuating. Karnataka and Goa region consistently exceeded the budgeted targets in the collection of income tax in the country. Although, corporate tax collection is a problem area in Goa, it is improving significantly. Industries have been growing at a phenomenal rate since 1961. It was observed that Goa, a tiny state in India, with no healthy environment for industrial growth at the at the time of her liberation, has performed well in terms of contribution of corporation tax to the national exchequer and there is scope for improvement in its performance.