India Needs Lower Rates To Increase The Tax Base: Arun Jaitley
The rate of taxation should be globally competitive and compatible, the FM said.
Finance Minister Arun Jaitley on Monday said that a lower level of taxation that is competitive and compatible with global standards is necessary to broaden the tax base of the economy.
"...What you need is broader base of economy, for which you need lower level of taxation...you need to manufacture and provide services which are competitive in character, therefore your tax rates will have to be globally compatible," Jaitley said while addressing a gathering of a new batch of IRS officers.
Jaitley also said that payment of taxes is a legitimate duty of citizens and those who do not comply will have to face severe consequences.
The finance minister said eventually all taxes levied by state and central authorities will converge into one, referring to the Goods and Services Tax which the government seeks to implement by April 1, 2017 or September 2017 at the latest.
"...Once they (taxes) converge into one tax, the cooperation between the state and central authorities will have to reach a higher standard. We will continue with this dichotomy because of our federal structure where the taxation levied by the state will differ from the taxation levied by the Centre, but the tax paid will be same, therefore divided in an arrangement we are trying to reach," he said.
Observing that there are no grey areas in criminal or tax laws, Jaitley said stricter principles would need to be applied to detect violation.
"There are no grey areas in taxation laws. It's either black or white. It's either payable or not payable. And therefore to discover grey areas in fiscal laws is not possible, that's the same principle that applies to criminal law also, either an offence has been committed or not committed," the minister said.