We need a simplified direct taxes code that will remove exemptions: Bibek Debroy
When GST was originally formulated, the revenue-neutral rate was expected to be around 18%, today the average GST rate is about 11.5%, so that clearly is not tenable, Debroy said.
Bibek Debroy, chairman of the Economic Advisory Council (EAC) to the Prime Minister, has stressed the need for tax reforms, including introducing the direct taxes code and removing tax exemptions.
During a virtual keynote address at Mint’s ‘Budget Conversations’, Debroy pitched for addressing the revenue shortfall because of the steep reduction of tax rates after implementing the goods and services tax (GST) regime.
“We need to talk about reform of taxation, a simplified direct taxes code, removing exemptions and also the goods and services tax. It is not only about integrating more products and services under the GST framework. It’s also about the GST rate. When GST was originally formulated, the revenue-neutral rate was expected to be around 18%, today the average GST rate is about 11.5%, so that clearly is not tenable,” he said.
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