In a globalising environment, the tax system has the function of raising adequate revenues to finance
competitive levels of social and physical infrastructure, but also should minimise distortions. Growth oriented tax system should minimise adverse effects on work, savings and investment, should minimise compliance costs and cost to the economy in terms of distortions and encourage formalisation of informal economy. The best practice approach to tax reform recommends broadening the base, reducing rates, minimising rate differences and having a simple and a transparent tax system which the country can administer well.
The talk will make a critical review of the Indian tax system â€“ its evolution and present structure and operation. Analysis shows that, despite the recent reforms, Indian tax system is mired in complexities and causes significant distortions. Multiplicity of objectives in tax policy and influence of special interest groups have added to complications and distortions and poor administration and information system have led to low revenue productivity. The recent reforms, and in particular, the creation of Tax Information Network (TIN) has increased the revenue buoyancy. The Direct Tax Code put out for discussion recently promises to broad base and simplify the tax system further.
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M. Govinda Rao, Director, National Institute of Public Finance and Policy
- Thursday, 27 August 2009
- 12.15 p.m. - 1.30 p.m.
Seminar Room 3-5
Level 3, Manasseh Meyer
Lee Kuan Yew School of Public Policy
469C Bukit Timah Road