The Chief Controller of Accounts reported that Service Tax collection went up 62.83% year on year from USD 3.19 billion to USD 5.19 billion.
Service Tax is a nominal flat tax charged for so-called professional services that normally avoid taxation such as doctor, advocate, auditor, and contractor fees. It also includes other services, which are normally not taxed.
Increased revenue collection from this segment is very good news as a large part of the economy has traditionally been under the radar and it looks like increased Government efforts to tax this segment is finally paying off. If anything, there needs to be more pressure to monitor expenses of those who own big ticket items such as cars and houses and bring in more revenue to bridge the yawning deficit.
The Government must also require those who own cell phones to file taxes so their expenses can also be monitored. There are large groups of people who claim to earn below the minimum tax levels but end up owning a lot of property and assets.
