Bad taxes like cess, surcharge need to go: Economic Survey
09/07/2014 17:40
The complex taxation system needs a revamp through new laws, GST and DTC, as "bad taxes" like surcharges, cess and dividend distribution levy need to "eventually go" so as to boost investments as well as GDP growth, Economic Survey said on Wednesday, reported PTI. Tabled in Parliament a day before the Union Budget, 2014-15, the Survey said the tax/GDP ratio of the government must be obtained through a burden-sharing mechanism where "low rates apply on a broad swathe of the population" through effective enforcement mechanisms, as per the media reports. Also, it said that "taxes clarified as 'bad' in public finance theory like cesses, surcharges, transaction taxes, and taxes imposed for ease of collection such as the dividend distribution tax, need to eventually go. Reducing tax related distortions can increase efficiency and fuel GDP growth". According to media reports, the survey pointed out that India's complex tax system suffers from problems in both structures and administration and the tax regime is used to industrial policy where the state gives exemptions and rebates to certain economic activity.
09/07/2014 17:40
The complex taxation system needs a revamp through new laws, GST and DTC, as "bad taxes" like surcharges, cess and dividend distribution levy need to "eventually go" so as to boost investments as well as GDP growth, Economic Survey said on Wednesday, reported PTI. Tabled in Parliament a day before the Union Budget, 2014-15, the Survey said the tax/GDP ratio of the government must be obtained through a burden-sharing mechanism where "low rates apply on a broad swathe of the population" through effective enforcement mechanisms, as per the media reports. Also, it said that "taxes clarified as 'bad' in public finance theory like cesses, surcharges, transaction taxes, and taxes imposed for ease of collection such as the dividend distribution tax, need to eventually go. Reducing tax related distortions can increase efficiency and fuel GDP growth". According to media reports, the survey pointed out that India's complex tax system suffers from problems in both structures and administration and the tax regime is used to industrial policy where the state gives exemptions and rebates to certain economic activity.
