20 JAN,2020 | MEDC
The Indian economy is in urgent need of tax simplification. Rather than coming up periodically with immunity and amnesty schemes, it would be better for the government to work towards improving public finances. To begin with, expenditure should be aligned with a realistic expectation of revenues. No one can afford to live beyond their means, and we often tend to overestimate revenues and underestimate expenditures. Tax simplification and rationalization is also necessary to revive the economy. Not only will this help enhance compliance but it will also reduce litigation, which is an impediment to sustained economic growth. About 500,000 cases are pending at different levels with the disputed amount worth Rs. 7-8 trillion. Our economy cannot afford it. Capacity should be built in the fiscal system to be able to identify and prosecute tax evaders. All this will go a long way in boosting government revenues.
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