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Informist, Thursday, Sep 5, 2024

 

--Sitharaman: Revenue is last consideration when making Budget 

--Sitharaman: Taxpayers' convenience, not revenue, key Budget aim 

--CONTEXT: Finance Minister Sitharaman speaking at event in Chennai 

 

MUMBAI – Finance Minister Nirmala Sitharaman today said that while raising revenue is important, simplifying compliance for the taxpayer is the first priority when making the Union Budget.

 

"Revenue is the last consideration with which every set of Budget meetings happen," Sitharaman said in an address to the Revenue Bar Association in Chennai. "During the Budget consultations I've had...revenue-raising comes later, simplifying and easing compliance on the taxpayer comes first."

Simplification of tax laws has been a decades-long demand of taxpayers and professionals alike, something voiced by the president of the Revenue Bar Association at the event. Sitharaman said the government had foregone revenue under the goods and services tax regime to make it easier for citizens to adopt it.

 

As of 2023, the average revenue rate from GST was 12.2%, against the recommended revenue-neutral rate of 15.3%, she said. The revenue-neutral rate indicates the average tax rate the government can impose through GST to match the rate of taxation and revenue generation on items before the regime was introduced in 2017. 

 

Sitharaman said that the federal system needs to be respected and considered as one, in order to have a taxation system in which revenue generation happens without causing a burden on taxpayers. If this is done, central and state governments could work together, both on widening the tax base and developmental activities, she said.

 

The finance minister added that tax evasion in the country needs to be curbed, and called on qualified tax professionals to explain and interpret the new taxation system for the public through social media. The "simpler" new income tax regime, introduced in 2020, is helping the government widen the tax base, the finance minister had said on Aug 21.  End

 

Reported by Cassandra Carvalho

Edited by Avishek Dutta

 

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