Don’t just raise taxes, but also grow the tax base, TN industries tell Revenue Augmentation Committee

Tamil Nadu’s industry bodies have urged the State’s new Revenue Augmentation Committee to move beyond conventional tax increases and focus on expanding the future taxable economic base, plugging revenue leakages through AI-led administration, and unlocking new sources of non-tax revenue.

From revenue intelligence platforms to monetising idle government land, rationalising real-estate levies and tapping ‘blue and green’ finance, industrialists highlighted a need to place technology, investment and economic growth at the centre of revenue strategy, in a recent meeting with economist Montek Singh Ahluwalia, the Chairman of the Committee.

SICCI said that all levers should be used to ensure that Tamil Nadu’s economy must grow faster than its debt.

A few key methodologies put forward by the industry body are the use of ‘Blue Finance’ as a lever to raise revenue. “Seychelles successfully rolled out the Blue Bonds scheme and raised $15 million . TN has the second largest coastline and could roll out a 10-year blue bond scheme for coastal development,” a spokesperson from the association said.

Similarly, it also called for aggressively promoting international investment and leveraging FTAs in Tamil Nadu through overseas desks.

“Lease or develop government land, waterfronts, transport assets and urban real estate through PPPs, long-term leases and transit-oriented development,” SICCI noted in its recommendations, estimating potential revenue of ₹1–2 lakh crore.

Tirupur Exporters Association (TEA) called for measures to expand the State’s future taxable economic base by promoting higher-value textile including man-made fibre garments, technical textiles, recycled fibres, advanced processing, textile machinery and testing and certification facilities.

TEA also proposed creating a Tamil Nadu Revenue Intelligence and Analytics Platform that would bring together legally available data from various authority systems so as to identify gaps between reported economic activity and potential tax liability.

Presenting FICCI’s recommendations before Ahluwalia and other members of the Committee, the association’s representative Divya Abhishek said in a LinkedIn post that bridging the revenue deficit requires smarter monetization, digital governance, and compliance rather than higher tax rates.

“Use AI data-matching for evasion over routine audits, and launch a ‘Samadhan’ scheme for pre-GST dispute resolution,” she said, highlighting a few key recommendations. FICCI also suggested capping commercial lease stamp duties to drive volume, and roll out presence-less property registration via CMDA’s SPEED portal.

Other industry stakeholders are also said to have stressed on reducing revenue leakages and tap new sources of revenue such as introduction of municipal bonds, congestion pricing, smart parking levies, and transit-oriented development charges among others. Other important revenue levers such as guideline value rationalisation and FSI increases were also discussed.

A statement from the TN finance department said that the suggestions received would be examined together with the inputs already received from the various revenue-generating departments of the State.