Tax kitty: FM looks to corporates

Finance Minister P. Chidambaram has said that the real expansion in tax collections could come from the corporate sector and “certainly...

Finance Minister P. Chidambaram has said that the real expansion in tax collections could come from the corporate sector and “certainly” not from the salaried class.

In an interview to to PTI, Chidambaram said he will push through a “massive tax reform” agenda in the forthcoming Budget to put in place a “simple and stable” structure.

His Budget priorities include a step up in the savings rate, simplification of both the direct and indirect tax regime and attracting investment, especially in agriculture and infrastructure.

Story continues below this ad

“You must be different in a substantive way. You will have to wait for the exercise to complete. Keep the tax structure simple but it should also be revenue generating,” he said.

Tax-reforms would aim to raise the tax-GDP ratio from the present 9 per cent to over 11 per cent . Measures like the annual information return (AIR) and tax information network (TIN) were to ensure that nobody who had the potential to pay taxes escaped the net, he said.

The government must find ways and means to encourage savings which are satisfactory but not good enough to sustain higher growth. “Savings, which are at present 22-23 per cent of GDP, need to be improved by 2-3 per cent.” he said. —PTI