Tax receipts improve as compliance widens

Tax receipts improved in the latest collection cycle, as a broader compliance drive brought more of the formal and informal economy into the net.

The pick-up eases, but does not remove, the pressure on the fiscal deficit. Higher revenue reduces the amount that must be borrowed, which in turn eases the competition between government and private borrowers for domestic savings.

Where the money comes from

Value-added tax and corporate income tax accounted for most of the increase, officials said, with improved digital collection lowering the cost of enforcement.

Economists cautioned that one good cycle is not a trend, and that the durability of the improvement depends on keeping the compliance gains as economic activity recovers.