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Holistic new tax code needed for Viksit Bharat, say experts ahead of Budget There is a need for a holistic new Tax Code with a focus on lower rates, widening base, improved collections and compliance for a Viksit Bharat, experts said ahead of Budget. A new philosophy of keeping it FLAT, with Fewer and lower tax rates, Litigation reduction, an All-inclusive wider tax base, and Tax collection without withholding it, is urgently needed to increase net tax revenues while energising the economy and realising the vision of a Viksit Bharat by 2047, they said. Budget 2025-26 is expected to be tabled in Parliament on February 1. "It is certainly not a good situation that we have so many tax rates under GST. Ideally, GST should be one tax rate, but in our country, it is not possible to have one tax rate," former chairman Central Board of Indirect Taxes and Customs P C Jha said. Three tax slabs can be considered (5 per cent, 16 per cent and 28 per cent) and 12 per cent and 18 per cent can be merged into a single rate of 16 per cent, he said while participating in a seminar organised by Think Change Forum (TCF). Supporting the need to simplify the current provisions in the taxation system, Rajiv Chugh, partner Ernst & Young said "reduction in tax rates will lead to rise in disposable income in the hands of citizens and companies. If rationalised, it can lead to a booming economy." There is a need for simplification of the tax laws, their consistency with focus on compliance and widening of the tax base, said Rajat Mohan, Senior Partner, AMRG & Associates. "The government loses more than 50 per cent of the litigation cases before they reach the Supreme Court. Recently, we have seen tax demands made on companies which don't even have revenues of the size of the tax demand. So, the litigation cases have to go down for a more efficient tax system," said Mohan. Though there have been incremental changes in the tax laws and a lot of ambiguities have gone, there still is a wide gap in international and Indian practices, and foreign investors are looking for consistency in Indian tax laws, Suraj Malik, Managing Partner, Legacy Growth said. www.business-standard.com, dt. 29-11-2024

Holistic new tax code needed for Viksit Bharat, say experts ahead of Budget

There is a need for a holistic new Tax Code with a focus on lower rates, widening base, improved collections and compliance for a Viksit Bharat, experts said ahead of Budget.

A new philosophy of keeping it FLAT, with Fewer and lower tax rates, Litigation reduction, an All-inclusive wider tax base, and Tax collection without withholding it, is urgently needed to increase net tax revenues while energising the economy and realising the vision of a Viksit Bharat by 2047, they said.

Budget 2025-26 is expected to be tabled in Parliament on February 1.

"It is certainly not a good situation that we have so many tax rates under GST. Ideally, GST should be one tax rate, but in our country, it is not possible to have one tax rate," former chairman Central Board of Indirect Taxes and Customs P C Jha said.

Three tax slabs can be considered (5 per cent, 16 per cent and 28 per cent) and 12 per cent and 18 per cent can be merged into a single rate of 16 per cent, he said while participating in a seminar organised by Think Change Forum (TCF).

Supporting the need to simplify the current provisions in the taxation system, Rajiv Chugh, partner Ernst & Young said "reduction in tax rates will lead to rise in disposable income in the hands of citizens and companies. If rationalised, it can lead to a booming economy." There is a need for simplification of the tax laws, their consistency with focus on compliance and widening of the tax base, said Rajat Mohan, Senior Partner, AMRG & Associates.

"The government loses more than 50 per cent of the litigation cases before they reach the Supreme Court. Recently, we have seen tax demands made on companies which don't even have revenues of the size of the tax demand. So, the litigation cases have to go down for a more efficient tax system," said Mohan.

Though there have been incremental changes in the tax laws and a lot of ambiguities have gone, there still is a wide gap in international and Indian practices, and foreign investors are looking for consistency in Indian tax laws, Suraj Malik, Managing Partner, Legacy Growth said.

www.business-standard.com, dt. 29-11-2024