With about a month to go before he presents the Union Budget, Finance Minister Arun Jaitley on Monday said India needs lower taxes to become globally competitive. The Budget will be presented on February 1, 2017 after the Centre decided to advance the date by a month. Jaitley was speaking at the National Academy of Customs Excise and Narcotics in Faridabad when said that lower taxes would enable “a broader base of economy”.
Jaitley claimed that for seven decades, Indians have considered tax avoidance “commercial smartness” because of the “extraordinarily high taxation rates”. Instead, he said, lower taxes would encourage people to comply with the norms. “The voluntary compliance by citizens by payment of due taxes needs to be reciprocated by authorities through a tax-friendly administration,” he added, according to The Hindu.
The Bharatiya Janata Party-led government has, since 2015, moved to lower corporate tax from 34% to 25% in a phased manner. It has also passed legislation to enable a Goods and Services Tax, which seeks to replace India’s complicated tax regime with a single levy. Experts also believe that the government might lower taxes in the 2017 Budget in an effort to boost citizens’ economic morale after the move to demonetise 86% of the country’s currency overnight has caused uncertainty and distrust.
On Sunday, Jaitley clarified that Prime Minister Narendra Modi’s statements from his last Mann ki Baat had not suggested raising taxes for the capital markets, saying his words were “misunderstood by some sections of the media”.
Buy an annual Scroll Membership to support independent journalism and get special benefits.
Our journalism is for everyone. But you can get special privileges by buying an annual Scroll Membership. Sign up today!