Taxation system in India...

Recently i read some article in the paper about how Indian enterprises are not incentivised to park their overseas funds in India. The inequitable tax structure in India stymies them from doing so . A company has to pay an extra tax for the funds acquired overseas which already have been taxed overseas. Our tax structure is a laggard in many respects. The 30 % corporate tax, although lesser than the 45 % corporate tax which existed in the socialist India, is still inequitable. There are huge loopholes in the transparency of the service tax and sales tax systems. An Indian shopkeeper would evade his sales tax, not only because that would save his money, but that would save him the cumbersome job associated with paying taxes in India. So, not only the taxation system has to be more equitable, but also transparent and easy for the taxpayer to get done with, without much labour.

How can it be more equitable? Well... The industrialists should not be seen as the scapegoats for the faulty government policies. They are the ones who have given us this miraculous growth, of which we are extremely proud of. In the socialist era, we could not have even fantasized the growth rate, which has manifested at the day. So, they should not be taxed so much. The articles which are double taxed at various state boundaries, should be taxed once. And that brings us to a relevant reform which is going to be incorporated. The Goods and Services tax. This reform in essence embarks on equitable taxation in our country. The goods which have been till day taxed multiple times across state boundaries, would be taxed now once, and the money would preferably be with the centre, which will distribute it to the states.

About making it more transparent, that would involve a lot of IT infrastructure to be set up, where every transaction, every detail related to taxation, every persons PAN no. and all such details should be provided on an online database, which should be made public. For this sufficient money should be ear marked to setting up the required IT infrastructure at the required places.

And about making it less cumbersome, the paperwork associated with the taxation process should be minimized, and more and more things should be done online, which will make it more transparent as well as easy to handle.

Even to maintain our industrial growth, serious reforms, like the G.S.T are needed and they should be done at any cost.