Journal Press India^®

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Tax buoyancy is a significant indicator of how well tax revenues are growing in line with economic expansion. The present study is undertaken to analyse the trends in direct and indirect taxes and their proportion in total tax collections, tax/GDP ratios, and buoyancy factors for the period of ten years from 2014-15 to 2023-24. The study finds that the percentage share of the direct taxes in the total taxes is slightly greater than that of indirect taxes in almost all the years. Direct tax buoyancy is mostly above one, indicating direct taxes grew faster than the economic growth. Indirect tax buoyancy shows extreme volatility driven by policy and crisis events. The tax system has achieved a high overall buoyancy, which is primarily sustained by the superior performance of the direct tax component, even though with the volatile conduct of indirect taxes.

Keywords

Tax; Buoyancy; Direct tax; Indirect tax; GDP

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