Initiating the chat on the new budget, the Finance Minister Arun Jaitely made positives of a lower tax regime. According to him, India need a transition to lower level of taxation to make the economy globally competitive.
The Finance Minister was speaking at the inauguration of IRS officers training at Faridabad.
In the last budget Jaitely made his plan to reduce corporate income tax rate to 25% from the current 34.6%. India is supposed to be a median tax rate country with corporate income tax rate placed at middle levels.
The new tax rate is reduction and exemption free as all such leakages are expected to be phased out with the reduction of rates to 25%.
Speaking about the need for a new tax structure, the FM stressed for a broader tax rate. He pointed out that tax rate to be reduced to ensure better compliance. “What you need is broader base of economy for which you need a lower level of taxation.”
Extra ordinary high tax rates have led to higher tax evasion in the past.
On personal income taxation, the FM noted that higher better compliance is needed from citizens. They should be encouraged by a tax friendly administration.
It is expected that the next budget will bring several initiatives as a follow up to the demonetisation attack on black money.