Reforms in existing tax policy should be handled on priority basis. This is the impression of some of the experts on tax matters. They argue that in its manifesto the BJP has called the existing tax system as “tax terrorism” and calls for a “tax policy roadmap”, and there is also a reference to bringing on board all State Governments in adopting GST. Many states have also called for reforms in existing GST.
The fact of the matter is that there are a host of issues that the new Government will be called upon to resolve as early as possible. In regard to existing tax policy, the foreign investors are facing hurdles owing to our rigid tax policy. Many business magnates have strongly advocated for reformation in financial sector. It has to be reminded that at present there is tax exemption for income up to 2 lakh rupees, and above that there are slabs. In his capacity as the Chairman of Parliamentary Standing Committee on Finance, Yashwant Sinha had recommended that income up to 3 lakh rupees should be exempted from tax instead of the upper limit of 2 lakh rupees.
The new Government is certainly seized of the matter and Narendra Modi has also made reference to the subject in some of his public speeches. It is good that some corporate chiefs have expressed themselves in regard to taxation issue. We hope the new Government will react at its proper time. However, it needs to be emphasized that the new Government will have to take drastic measures to stop the practice of evading taxes on the part of established business houses and persons. Some relief has to be given to law abiding citizens.
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