How Simplifying tax systems can generate value for India

The indirect tax system of India which was supposed to create a unified market throughout the whole of India with the implementation of GST, has only partially achieved its goals. The compliance processes with regard to GST remain complicated and its adds to the woes of businessmen. Similarly, the number of tax slabs in the GST system have added to endless confusion and litigation about exact tax slabs to which certain items belongs. India would do well with just  3 tax slabs in the GST system .i.e 5%, 15% and 25%. Rest other tax slabs cab be removed for the sake of betterment of this country.

Similarly, our direct tax system has several loopholes and provides several kinds of tax deductions. The rules are often difficult to understand and it leads to poor compliance. Some provisions are grossly mis-used. For example, Since agricultural income is not taxed, many dishonest people often report their ill gotten wealth as agricultural income. Also lot of deductions/ allowance only makes the process of tax compliance cumbersome. A simplified direct tax code can make the entire process easy to implement with better compliance.