BUDGET LIKELY TO REFORM GST FILING PROCESS
NEWDELHI: The budget is expected to announce several direct and indirect tax reforms including further simplification of incometax laws to encourage voluntary compliance and widening the tax base, and which involve more use of technology, people aware of the development said on condition of anonymity.
The finance ministry has been working on simplifying archaic income-tax laws and rationalising tax rates in line with recommendations of the task force on the Direct Tax Code (DTC), which submitted its report on August 19, 2019, they added.
“Suggestions of the task force are being considered on merit,” one of them said. Finance minister Nirmala Sitharaman told the Rajya Sabha on December 5, 2019, that the DTC was “under examination”.
Besides simplification of tax laws, the task force also proposed lower tax rates, particularly personal income-tax rates, to enlarge the tax base. The government constituted the task force in November 2017 to review the existing income-tax legislation and to draft a new direct tax law in consonance with the economic needs of the country.
“Both internal and external technology experts are also working in this direction; the purpose is to further simplify the taxation system for voluntary compliance. This is also proposed by a group of economists, whom the FM consulted last month,” a second person said.
On December 20, 2019, Sitharaman held a pre-budget consultation with prominent economists, who suggested further simplification of direct and indirect tax regimes.