Economists favour cut in income tax rate; harmonise custom rate

NEW DELHI: Simplification and reduction in personal income tax rates and harmonisation of customs duties to global levels in a bid to boost economic activities were favoured by economists at a meeting chaired by Prime Minister Narendra Modi at Niti Aayog.

The meeting, which comes ahead of the Budget slated to be held in early February, did not go into the impact of demonetisation on the economy while the aspect of digitisation to make it a less cash economy figured.

“Tax simplification figured quite a lot…On the direct taxation, both corporate and personal income tax on simplifying, reducing exemptions, bringing down tax rate and aligning tax system to make India competitive with international destination,” Niti Aayog Vice Chairman Arvind Panagariya told reporters.

He was briefing the reporters about the outcome of the meeting on “Economic Policy – The Road Ahead”.

About the inverted duty structure, it was suggested to harmonise the tariffs to resolve the issue.

“One of the issues that came up (for discussion) was tariff inversion whereby tariff on component and inputs are higher than the final products so that undercuts the incentive to produce the final product,” Panagariya said. (AGENCIES)

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