Chidambaram Pledges To Cut Indian Taxes To ASEAN Levels

by Lorys Charalambous, Tax-News.com, Cyprus

13 May 2005

Launching a new online tax payment system on Wednesday, Indian Finance Minister Palaniappan Chidambaram pledged to reduce the level of taxation in India to that seen in ASEAN members (Association of South East Asian Nations), whilst also promising additional measures to improve tax compliance.

Talking up the government's commitment to tax reform, Chidambaram promised that India would soon have the best tax rates in the world.

"In the course of time, it is our endeavour to bring down tax rates to the ASEAN level," he said during an announcement which also heralded the launch of new facilities to smooth tax administration for large firms, including the introduction of help centres for small business taxpayers.

However, Chidambaram added that the government's plan to reduce the tax burden will go hand in hand with measures aimed at improving levels of compliance and stamping out dubious tax planning schemes.

“If non-tax payers pay taxes, tax rates could be further moderated,” he argued, noting that only 80,000-85,000 individuals show income of R1,000,000 ($23,000) and above.

"I don't believe in heavy handedness," he continued.

"In certain cases, we have to resort to search and seizures. But it is a thing of the past and will be replaced by information gathering and intelligent use of that information," he added.

Recommended