I don't think indian tax rate is particularly high, especially personal income tax. It is on par with most of the developed nations. What we really need is widening the tax base and forcing people to actually pay their taxes. Just one look at the percentage of population that is registered as tax payers will give you the idea.
This is NOT to Question the Authority of the Author. But when he talks about Tax (I.T.) to GDP Ratio in India being lower to many other Countries does he take into consideration the Poor Compliance in India and also the Non Existence of the Collection Drive?
Only when there is enough of matching efforts towards Revenue Collection as compared to the efforts to have more Numbers roped in to the PAN List there would be improvement in the Ratio also.
As a salaried personal who pays tax correctly every year, I know how much each of the saried person's are suffering by the current tax itself. The root cause of the deficit is mainly because of the millions of rich people and polititians who are not paying tax at all. Govt' needs to formulate a way to force all these cheaters to pay the tax.
Can we have articles that are written in plain english and not jargonese....this referred article could just as well have been written in Chinese for the ease with which it could be read or are you only catering for super intellectuals with Ph.Ds in eceonmics and the like???
I have suggested earlier too - and I sincerely believe the following:
First, make cash payments illegal beyond Rs. 10,000 per transaction. All other transactions can only be through banks or credit cards.
Second, each transaction will be taxed 10%. The banks and credit card companies are responsible to pay this tax to government. There will be no other tax - income tax, corporate tax, excise tax etc - will cease to exist.
Third, a small percentage of this tax will be for the central government - again directly paid into the central government account by the banks / credit cards.
Fourth, the percentage will be decided based on the central budget of the last financial year as portion of the overall budget.
Fifth, each state to aim for a minimum return of 5%; 50% of net income of the state will be declared as dividend to center - the remaining will invested back into the state.
Sixth, the investment in the state by the state and central government will follow the standard business practice of nurturing new areas and then let go to the private sector. The government will abide by the rule "that it has no business to be in business" and is regulator & security provider
It's necessary to tax the people properly not only to take care of fiscal problems but also to make people more interested in public affairs. Citizens will be more responsible and vigilant against corrupt practices if they know that it's their hard earned money that is being pilfered by few people.
In India the low taxation gives rise to the AK-PMG culture. AK-PMG: Aam kha, peR maat ginn (eat the mango, don't count trees). Everybody who feel they are intelligent enough think it's better to steal and let others steal the booty; and those who are the bottom suffer without even knowing who are stealing their pie and how. Once the richer people are properly taxed, they will themselves take care that their money is spent properly (think of the people who complain about road potholes in conjunction with the quotation of amounts they spend on road taxes).
To make our nation a real superpower, we neither need Nuclear Bombs, nor projects like Linking rivers (which will make millions of poor people refugees in their own nation). We just need to check the AK-PMG culture. India will be truely democratic as well as developed when every paisa spent by every government will be accounted.
certainly not! I wouldn't pay a paisa more until I see the cash guys are got into the net...the cash guys incl the builders and politicians...including the communists..their outward innocence isn't lost on anyone....frankly, i get very angry that I am part of a miserable 1 percent fall guys who have to cough up a royal part of our measly salary for all the thievery.
I do not think India needs to raise the rate of taxation. What all it has to do is to de-corrupt the system and realise more tax collections. Tax avoidance is something that needs to be addressed and remedial action taken.
It is a case of fense eating the crop in India. The more tax rate means more avoidance and corruption. Although compulsory PAN has widened the tax net, actual collection falls short because of avoidance aided and abetted by corrupt revenue officials.
