FM Arun Jaitley promises to rationalise taxes to tackle black money issue

Sketching out the roadmap of the Modi government in the days to come, Finance Minister Arun Jaitley has promised to rationalise tax rates for individuals; to bring down corporate tax to flat 25% in four years beginning next fiscal and to remove exemptions other than those that encourage individual savings.

While addressing students and faculty at the Columbia University, the finance minister asserted that in order to tackle the long-lasting issue of black money that India is facing, more banking transactions and making PAN card compulsory for payments over a threshold limit will go a long way. "The first step is you rationalise your rates and have rational rate of taxation which helps you in making sure that people comply,” the finance minister said.

"The second factor is that the nature of the economy is itself changing so more and more banking transactions, payment getaways are a reality, all this is going to incentivize and a lot of economy is going to go through the banking transaction as a result of this," added Jaitley.

Once the corporate taxes get slashed, Jaitley stated that the exemptions will have to be phased out. Apart from this, he also added that the Goods and Services Tax (GST) will be a "top priority" and hoped to take the Bankruptcy Code to Parliament during the upcoming Winter Session.

Jaitley further added that aggressive taxation did not benefit the country in anyway, rather it "brought us a bad name.”
He, however, expressed satisfaction that one by one each of those issues related to direct taxes is now being put to rest.
(Image: PIB)