New Delhi: There is a need to change the taxation mindset from rates to revenue by reducing tax rates and broadening the base to achieve the goal of 'Developed India' by 2047, experts said.
He underlined the need for a shift from rates to revenue with a focus on reducing tax rates, increasing the tax-paying base and thus creating a means of financing India's investment and development needs.
Sudhir Kapadia, senior partner, EY India, said, "Traditional high tax rates have not resulted in significant tax buoyancy. Recognizing this fact, governments in India since 1991 have clearly advocated for moderate tax rates. , thereby increasing the level of transparency and compliance."
He said, it is time to take steps to reform direct taxes, there could be a simplified rate structure for businesses and for individuals, there could be a simple three-rate structure with low or medium rates, no surcharge. And there will be no cess.And no significant cuts.
On GST, he said, a lot has been said about rates and clearly the time has come to significantly reduce the number of rates in the GST framework.
“It is also time to ensure that we do not have any barriers related to availing input tax credit. Income tax revenues have increased steadily, but we need to focus on taxpayers' experience with the tax administration and ensure that There is a need to ensure that the filing process remains seamless and hassle-free,” he said.
India's tax to GDP ratio is influenced by the presence of a thriving informal sector, which still accounts for 30 per cent to 35 per cent of the economy, Kaushik Dutta, director of the Thought Arbitrage Research Institute, said at a seminar organized by the Think Change Forum here.,
"The simplified GST regime will enable them to join the formal economy, take input tax credit and become competitive. Tax evasion along with classification issues remains a major challenge. Inverted duty structure is also a hindrance. Another area which will be affected by GST is has not been able to break into e-commerce, hence, there are challenges and they need to be addressed," Dutta said.
According to Pulin B Nayak of the Center for Development Economics, "India is still in the group of developing economies.Due to low per capita income, there are fewer income tax payers. Keeping tax rates too high is also a bad idea because it will lead to tax evasion and people will want to marginalize their work effort.
Nayak said, increasing tax to GDP ratio should be a priority as this will enable the government to spend on public goods, infrastructure and social sector.
“We need to widen the tax base with minimal deductions and exemptions, and we need to maintain moderate rates.This is also suggested by the vast amount of theoretical research in the field of optimal income taxation, which was initiated by the late Nobel. Award-winning James Mirrlees,” he said.
Expressing similar views, Ranganath Tannir, general secretary of Think Change Forum, said that reform in taxation is the need of the hour and the government should consider reducing the tax rates and increasing the taxpayer base as soon as possible.
He underlined the need for a shift from rates to revenue with a focus on reducing tax rates, increasing the tax-paying base and thus creating a means of financing India's investment and development needs.
Sudhir Kapadia, senior partner, EY India, said, "Traditional high tax rates have not resulted in significant tax buoyancy. Recognizing this fact, governments in India since 1991 have clearly advocated for moderate tax rates. , thereby increasing the level of transparency and compliance."
He said, it is time to take steps to reform direct taxes, there could be a simplified rate structure for businesses and for individuals, there could be a simple three-rate structure with low or medium rates, no surcharge. And there will be no cess.And no significant cuts.
On GST, he said, a lot has been said about rates and clearly the time has come to significantly reduce the number of rates in the GST framework.
“It is also time to ensure that we do not have any barriers related to availing input tax credit. Income tax revenues have increased steadily, but we need to focus on taxpayers' experience with the tax administration and ensure that There is a need to ensure that the filing process remains seamless and hassle-free,” he said.
India's tax to GDP ratio is influenced by the presence of a thriving informal sector, which still accounts for 30 per cent to 35 per cent of the economy, Kaushik Dutta, director of the Thought Arbitrage Research Institute, said at a seminar organized by the Think Change Forum here.,
"The simplified GST regime will enable them to join the formal economy, take input tax credit and become competitive. Tax evasion along with classification issues remains a major challenge. Inverted duty structure is also a hindrance. Another area which will be affected by GST is has not been able to break into e-commerce, hence, there are challenges and they need to be addressed," Dutta said.
According to Pulin B Nayak of the Center for Development Economics, "India is still in the group of developing economies.Due to low per capita income, there are fewer income tax payers. Keeping tax rates too high is also a bad idea because it will lead to tax evasion and people will want to marginalize their work effort.
Nayak said, increasing tax to GDP ratio should be a priority as this will enable the government to spend on public goods, infrastructure and social sector.
“We need to widen the tax base with minimal deductions and exemptions, and we need to maintain moderate rates.This is also suggested by the vast amount of theoretical research in the field of optimal income taxation, which was initiated by the late Nobel. Award-winning James Mirrlees,” he said.
Expressing similar views, Ranganath Tannir, general secretary of Think Change Forum, said that reform in taxation is the need of the hour and the government should consider reducing the tax rates and increasing the taxpayer base as soon as possible.
