The increase in direct taxes has not been able to offset the decline that resulted from the reduction in customs tariff and decline in excise revenue. The task facing the policymakers now is to explore ways in which the tax ratio can be pushed up without going back on the basic elements of the reforms carried out so far, namely, without raising the rates or resorting to distortionary taxation. The task has acquired urgency with governmentâ€™s obligation to abide by the deficit targets set under the Fiscal Responsibility and Budget Management Act and the expenditure commitments of the United Progressive Alliance. Under the restructuring plan drawn up by the Twelfth Finance Commission (TFC), incorporating the FRBM commitments of the union government, the targets set for revenue mobilisation are modest. Given the constraints, the options are: one, tightening the administration and two, widening the base not so much in terms of the number of taxpayers brought under the net but the content of what is subjected to tax (which, no doubt, will have its impact on numbers as well). To improve the revenue productivity of the tax system in the short-run without tinkering with the rates is to take a look at the base of the major union taxes viz., income tax, excise and customs, and explore how they can be widened keeping in view the constraints. The main thrust of such an exercise has to be a review of various exemptions and concessions â€“ the â€˜tax breaksâ€™ â€“ that abound in all the taxes and erode the base and their revenue productivity.