Corporate tax rates will not be cut until the levels of personal income tax collected increase, India’s finance secretary has warned.
Hasmukh Adhia made it clear that he and other policy makers are unhappy that salaried individuals pay more tax than corporate directors. As a result, he wants to “remove the unevenness” in tax collection, according to Live Mint.
Speaking at an event organised by industry body the Confederation of Indian Industry, Adhia pointed out personal income tax receipts are far higher than corporate tax collections in many countries.
“When it comes to the demand for reduction in overall corporate tax rate, we are not denying that claim,” he said. “However, in India, PIT [personal income tax] collection has to go up. Once that happens, we will have some more scope.”
Adhia believes that technology could play an important role in improving tax compliance on both the corporate and personal level.
For instance, the government is looking at ways to encourage traders to issue bills to consumers in a bid to prevent them evading the goods and services tax (GST). One approach could be to send them bills with invoice numbers generated in advance from a centralised system, according to The Times of India .
The Finance Bill 2018 proposes a standard tax deduction of Rs40,000 (US$621) per year, plus another deduction for healthcare expenses and interest earned by senior citizens. It also suggests levying a 10% tax on long-term capital gains above Rs100,000 (US$1,551)
Recent major structural economic reforms are already producing results in terms of boosting direct tax collection, Adhia said.
Notices sent to people with large bank deposits who declared suspiciously little income following the introduction of a demonetisation policy in November 2016, would be followed up, he added.
Gill Oliver is a business and property journalist who has written for The Daily Mail/Mail Online's This is Money, The Press Association and many national and regional newspapers and magazines.
Corporate tax rates will not be cut until the levels of personal income tax collected increase, India’s finance secretary has warned.
Hasmukh Adhia made it clear that he and other policy makers are unhappy that salaried individuals pay more tax than corporate directors. As a result, he wants to “remove the unevenness” in tax collection, according to Live Mint.
Speaking at an event organised by industry body the Confederation of Indian Industry, Adhia pointed out personal income tax receipts are far higher than corporate tax collections in many countries.
“When it comes to the demand for reduction in overall corporate tax rate, we are not denying that claim,” he said. “However, in India, PIT [personal income tax] collection has to go up. Once that happens, we will have some more scope.”
Adhia believes that technology could play an important role in improving tax compliance on both the corporate and personal level.
For instance, the government is looking at ways to encourage traders to issue bills to consumers in a bid to prevent them evading the goods and services tax (GST). One approach could be to send them bills with invoice numbers generated in advance from a centralised system, according to The Times of India .
The Finance Bill 2018 proposes a standard tax deduction of Rs40,000 (US$621) per year, plus another deduction for healthcare expenses and interest earned by senior citizens. It also suggests levying a 10% tax on long-term capital gains above Rs100,000 (US$1,551)
Recent major structural economic reforms are already producing results in terms of boosting direct tax collection, Adhia said.
Notices sent to people with large bank deposits who declared suspiciously little income following the introduction of a demonetisation policy in November 2016, would be followed up, he added.
Gill Oliver is a business and property journalist who has written for The Daily Mail/Mail Online's This is Money, The Press Association and many national and regional newspapers and magazines.
