PremiumThe Think Change Forum (TCF) has submitted suggestions including widening the tax base, removing cess and surcharge improving compliances, and moderating taxes for emerging sectors to the Finance Ministry ahead of the Union Budget 2023-24. It is believed that there is a need for an increase in tax revenues for the government to drive economic growth alongside making investments in development activities.
As per Sanjaya Baru, former media adviser to Manmohan Singh and Advisor, to Think Change Forum, a large section of individuals in India escape and avoid taxes without being punished for it. He said, only a small percentage pays their taxes in India.
In a PTI report, Baru said, "if we compare our Tax GDP ratio with other rapidly developing economies it is below par. We also need to leverage technology to cast the net wider and increase compliance. Predictability in the taxation system is equally important to ensure compliance."
Further, Swapan Sarkar, Owner Sarkar, and Associates highlighted that the country has several other components apart from the tax rate. These are surcharge and cess.
Sarkar said that the cess and surcharge are paid by individuals as well as corporates along with tax rates paid on their earned income. Such increases the total tax payout which can go as high as 42% in the case of individuals as the surcharge on individual taxation is around 10 to 35%.
Thereby, Sarkar added, in the PTI report that the Government should completely do away with cess and surcharge as it is responsible for an overall increase in direct tax payout and disturbs the federal structure of the country as well.
Finance Minister Nirmala Sitharaman will announce the Union Budget for fiscal 2023-24 on February 2.