The collections from Central's Direct tax grew by 20% to about 11.35 Lakh Crore while Goods and Services Tax (GST as we know it) grew by 26% to about Rs 11.9 lakh crore in December due to an increase in consumer spending and with the help of improved compliance.
Key reasons for the additions to tax base include:
1. Govt. efforts on Simplified tax regimes (GST, TDS, TCS) with low rates and lower exemptions yet equally supporting growth have helped ramp up revenues
2. Revamping the access to Cheaper financing & Raising the bar for ease of setting up businesses in India, leading to an Improved economic activity of the country.
3. Rise in digitalized payments bringing in a lot of small businesses into the formal tax system.
As far as investments are concerned, improved government revenue gauges business cycles in an economy, creating better opportunities endeavoring to better asset creation, and improved tax subsidies, building up the long-term cycling of an increased wealth outlook.