FICCI moots 10-point strategy for efficient tax system
FICCI has called for simplfied tax laws and procedures, framing of a long term fiscal policy, widening of tax base and continuation of tax incentives. FICCI sought a growth and saving oriented taxation while stating that tax reforms should not lead to significant revenue loss.business Updated: Feb 18, 2003 15:06 IST
Charting out a 10-point strategy for an 'efficient and effective' tax system in the country, FICCI has suggested simplified tax laws and procedures, framing of a long term fiscal policy for a period of five years, widening of tax base and continuation of tax incentives.
In its pre-budget memorandum, FICCI said: "there is a need to instil some essential attributes in the tax systems which include simplicity, stability, equity, efficiency, neutrality, flexibility, progressivity, acceptability and revenue elasticity."
Suggesting that the government frame a long term fiscal policy for five years, FICCI said: "the said policy will impart a definite direction and coherence to the sequence of annual budgets."
It said that effective coordination of different dimensions of economic policy -- fiscal, monetary, industrial and trade policy -- will be facilitated by a long term perspective to policy making.
FICCI suggested modification and simplification of Income Tax Saral form and said the concept of indexation in principle should be introduced for all monetary limits prescribed under the various provisions of the Income Tax Act.
FICCI also sought a growth and saving oriented taxation while stating that tax reforms should not lead to significant revenue loss.
Pointing to the urgent need to widen the tax base, FICCI said the widening of tax base will correct imbalance in tax collections and also help plough back sufficient resources on the other.
"It was important that commercial operations under agriculture should be brought under the purview of tax net," it said suggesting that the government tax the rich rural segment.
Suggesting procedural reforms, especially in areas such as tax deducted at sources, search and seizure provisions, FICCI said there was need to simplify, rationalise and bring the tax laws into the main stream of new business and technological culture.
FICCI also recommended efficient and effective tax administration apart from a policy decision on the issue whether a large number of changes should be brought in the acts through the finance acts or through amendment acts after examination by a department related standing committee.
First Published: Jan 02, 2003 13:23 IST