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    We are going to see a reasonable spurt in tax to GDP ratio: Shailesh Haribhakti

    Synopsis

    The whole idea of leaving out half the taxpaying population (rural rich agrarians) potentially from the tax network has to be removed as an idea. We need to think about extending the tax base in that way, says Shailesh Haribhakti of Haribhakti & Company. Edited excerpts:

    Shailesh Haribhakti-1200ETMarkets.com
    What is sense that you get regarding the PM’s speech that the tax burden needs to go down, honest tax payers need to go ahead and one needs to widen the tax base. What was getting communicated and how can it be done?
    This is a very important speech from the Prime Minister. It gives us a sense of the mind of the government and what direction the tax gathering and taxpaying public will have to go. The taxpayer charter is indeed an extremely valuable input into the whole system and already a lot of the compliance orientation has set in.

    Now, the tax information network is very strong and the way that the assessments and filings are being done electronically and cross verification has become possible because the financial footprint is all over the place. We are going to see a reasonable spurt in the tax to GDP ratio as the Prime Minister was keen on seeing that happen naturally. This is very important and if what he said later, the fear of being harassed by the agencies is a thing of the past, then we will have a truly wonderful tax framework.

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    We have vivad se vishwas, we had faceless scrutiny, we had PM Modi saying that tax terrorism is a thing of the past. Don’t you think we are anyway in a regime which is much more friendlier to the taxpayer? Finance Minister Sitharaman is saying that there is going to be a taxpayer statute. What is the significance of that as well? Once again, jibe is coming in that the salaried class is paying taxes and the tax is being used essentially for let us say a farmer who is earning much more than maybe a clerk! Do you think the government would perhaps do more to appease the taxpayer?
    I have been a great believer and I have said this publicly and I will say it again that there is no reason for us to not tax the high income earning agricultural income, if it exists in any place in India. This whole idea of leaving out half the taxpaying population potentially from the tax network has to be removed as an idea. We need to think about extending the tax base in that way.

    There is absolutely no justification for this anymore. Yes, we do have a tax regime which is taxpayer friendly but the effort of the CBDT will have to be focussed to make sure that all the little niggles that there are in terms of adjusting past refunds, in terms of making sure that the refunds flow out on time etc. If the system becomes adept at doing these kinds of changes, then the taxpayer population will be happily performing its complete role.

    The taxpayer charter is really amazing. If that is seriously implemented and if people respect it, all the pronouncements that we are hearing should see a completely different relationship emerging between the taxpayer and the tax gatherer.

    In order to get real fruits of what we are doing now, could there be some transition challenges?
    Yes, the systems will have to be tweaked and operated more efficiently. It will take a little bit of time but in today’s world with all of this exponential technology available to us and India having the brightest minds in IT, I cannot see why this should take more than a transition period of 12 months. I would imagine that with effect from assessment year 2021-22, we should start experiencing the big fundamental changes that are being set in process.



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    (What's moving Sensex and Nifty Track latest market news, stock tips and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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