Naidu stresses on increasing tax- to- GDP ratio

Speed Post News Network

New Delhi : The Vice President of India M Venkaiah Naidu on January 23, 2018, said that every citizen must consider it as his sacred duty to pay taxes as development and welfare measures would suffer if governments do not get adequate revenues.

Naidu was addressing a National Seminar on Contemporary challenges and issues in Marketing and Finance at, Keshav Memorial College, in Hyderabad. The Deputy Chief Minister of Telangana, Mohammad Mahmood Ali and other dignitaries were present on the occasion.

The Vice President said that while tax evasion has to be dealt with sternly, it should be ensured that there is no unnecessary harassment of the tax payers by overzealous officials. Transparency in governance will ensure accountability and also improve remittances to the government, he added, according to a PIB release.

The Vice President said that with introduction of GST, the biggest ever tax reform taken since Independence, India is finally ‘one-country, one-market’. He said that this reform has changed the face of the indirect tax regime in the country as it imposes one tax instead of several taxes by various State Governments and the Union Government.  It has made compliance easy for businesses and traders and demonstrated the victory of bipartisanship in the democratic and federal set-up of India, he added.

The Vice President said that the expanding middle class will be the key driver of India’s economic growth in the coming years and the need of the hour is to take full advantage of this demographic numbers by creating adequate job opportunities for the young population.  He said that merely turning out lakhs of students with degrees is not enough, we have to provide them skills not only to earn livelihood but life skills that will enable them to deal effectively with any situation.

India’s tax-to-GDP ratio is 16.6 % in FY2017, compared to 26 % in USA, 20.1% in China, and 34.3 % in OECD countries. India needs to significantly ramp up its tax-to-GDP ratio to fund a modern 21^st century government which can offer basic public goods and social security to its citizens, Naidu said. Direct tax collected in 2018 YTD ( Year- to- date)  has grown at 18.2 %. This increase in collection has been driven by increase in compliances with the number of taxpayers increasing for both direct and indirect taxes, he said.  Altogether 5.9 million tax-payers have registered for GST and 28.2 million people filed their income-tax returns for FY 2017, according to the PIB release.