January 23, 2018

Waiting for Historic Direct Tax Reforms

In this New India Express article, Shankkar Aiyar, Visiting Senior Fellow, IDFC Institute writes about the need for direct tax reforms in the country. He stresses on the need to bring more people under the tax bracket.




"Between 1997  and 2017 finance ministers have lamented on the paradox of rising consumptionand the low number of taxable returns, on the gap between rising incomes implicit in consumption data and explicit tax revenues. Last year, Finance Minister Arun Jaitley went so far as to say Indians “are largely a tax non-complaint society”, pointing out that only 1.72 lakh persons out of a population of 131 crore showed an income of `50 lakh... The focus this year is on long term capital gains tax. There is the argument that the combination of lower interest rates and capital gains tax boosts investment and growth. There is the political counter that rising numbers of Indian dollar billionaires and those profiting must pay their dues to society — and anyway only a handful of countries, tax havens included, do not tax long term capital gains."


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