This refers to T N Ninan’s column “A fully taxed nation” (February 25). Increasing tax revenue seems to be the Centre’s responsibility. That is why state governments are always complaining about the Union government usurping the power to tax but ironically they also want more central funds to meet their requirements. With regard to the introduction of the goods and services tax (GST), the opposition-ruled states may have some genuine grievances but they have shown little pragmatism and maturity in handling the issue. As a result, the introduction of the GST has been unnecessarily delayed and that is not good for the country’s fiscal health.
On rates of taxation, I believe there is not much evidence to show that reduced rates of individual income tax lowers the generation of black money or lessens the urge in non-salaried tax payers to evade tax. Therefore, to increase tax compliance and thereby revenue and to curb the generation of black money, revamping tax administration, implementing reforms and better coordination between the excise, the income tax and states’ commercial tax departments are a few important steps that need to be taken.
Narendra M Apte Pune
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