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Era of tax avoidance to minimise liability over, warns CBDT
PrintThe large taxpaying entities are part of the tax base but they understate their income, the Central Board of Direct Taxes (CBDT) Chairperson Anita Kapur said, pointing towards the findings of a recent study on Thursday at a tax conference.
"National Institute of Public Finance and Policy (NIPFP) study showed us our missing tax population which has an income of Rs 4 lakh annually. We don't have large taxpayers missing from our base; they are in the base but they are understating their income," said Kapur, at the global tax conference organised by the Confederation of Indian Industry.
The CBDT had asked think-tanks NIPFP and Indian Council for Research on International Economic Relations to identify the tax gap in the system.
In line with the budget announcement, Kapur said that the CBDT is looking at removing exemptions to simplify taxes. "Too many incentives tend to distort the law and lead to excessive litigation," said Kapur.
Finance Minister Arun Jaitley had announced reduction in the corporate tax to 25 per cent from 30 per cent over the next four years, while simultaneously the government will phase out corporate tax exemptions and deductions.
The CBDT chairperson said that tax laws need to be simplified as studies showed that people do not want to pay taxes for two reasons - complex laws and tax administration not facilitating compliance.
Cautioning that the era of tax avoidance is over, Kapur said that the government will take action against those trying to organise businesses with a view to minimise liability.
"Tax is in the boardrooms. Tax is no longer in the offices of the CFOs, because your brand will suffer if you get a stigma of being a tax avoider," Kapur said. (Business Standard)
"National Institute of Public Finance and Policy (NIPFP) study showed us our missing tax population which has an income of Rs 4 lakh annually. We don't have large taxpayers missing from our base; they are in the base but they are understating their income," said Kapur, at the global tax conference organised by the Confederation of Indian Industry.
The CBDT had asked think-tanks NIPFP and Indian Council for Research on International Economic Relations to identify the tax gap in the system.
In line with the budget announcement, Kapur said that the CBDT is looking at removing exemptions to simplify taxes. "Too many incentives tend to distort the law and lead to excessive litigation," said Kapur.
Finance Minister Arun Jaitley had announced reduction in the corporate tax to 25 per cent from 30 per cent over the next four years, while simultaneously the government will phase out corporate tax exemptions and deductions.
The CBDT chairperson said that tax laws need to be simplified as studies showed that people do not want to pay taxes for two reasons - complex laws and tax administration not facilitating compliance.
Cautioning that the era of tax avoidance is over, Kapur said that the government will take action against those trying to organise businesses with a view to minimise liability.
"Tax is in the boardrooms. Tax is no longer in the offices of the CFOs, because your brand will suffer if you get a stigma of being a tax avoider," Kapur said. (Business Standard)
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