Why can't we raise the levels to above Rs 10 lakhs where a lot of people will fall below the tax limit and black money comes into the system which itself can raise the GDP?
Jayant Sinha: If I understand the question correctly, what you are asking is why don't we increase the slabs dramatically from Rs 2.5 lakhs to Rs 10 lakhs. That way you think we'll increase tax collection and grow GDP.
I wouldn't agree with you.
We can obviously think about the slabs and if there is a way in which we can do it while being revenue neutral or by growing revenues. Of course, we would like to be able to do that. But we have to really be convinced that indeed is the case.
As far as making it easy for tax payers to file their returns and pay their taxes, we are completely committed to doing that. This time a lot of people did their e-filings and because they had straight-forward tax returns, they actually got their refunds back into their bank accounts very, very quickly. So we are doing whatever we can to make it really, really easy to pay your taxes.
Do you know what India's tax-to-GDP is? 10%.
If you add in the states it is 15-16%.
The OECD average is 35%.
Most large developing countries have tax-to-GDP around 20-25%.
So our tax-to-GDP is far below where it needs to be.
We really need to create a culture of compliance, a culture where people pay the tax that is actually owed, so that in turn we can provide you the public services that you want.
You want better health care, better education, better roads, cleaner cities, and we can only deliver that if people pay their taxes. So, we have to find ways in which we can actually increase tax compliance and increase India's tax base, so that we can, like any word-class 21st century economy, provide the public goods and public services that citizens expect and deserve.
