Budget Provides Clear Policy Direction For $5 Trillion Economy: CBDT Chairman

New Delhi, July 10:  The Union Budget that was presented on July 5 has provided a clear policy direction for India to become a $5 trillion economy, said Pramod Chandra Mody, Chairman, Central Board of Direct Taxes, adding that the proposal of ease of living will help in better tax compliance.

“As we read the fine print of the budget, I find this is very distinctive budget. Unlike the past it has given a very clear policy direction or a roadmap for an India that we envisage, the new India with $5 trillion economy,” Mody said at a seminar organized by the CII here on Wednesday.

“Our economy was at approximately $1.85 trillion when we formed the government in 2014. Within 5 years it has reached $2.7 trillion. Hence, it is well within our capacity to reach the $5 trillion in the next few years,” Finance Minister Nirmala Sitharaman said in her maiden Budget speech on July 5.

“The underline theme of the budget, which pervades all the proposals is promoting the concept of ease of living. I find trying to achieve tax compliance would also contribute to that ease of living. And then we talk about ease of tax compliance. It is also both at the policy level and the process level. So far as policy is concerned various measures have been taken to promote that and even in process level, which again has happened for the first time,” Mody said.

Regarding the announcement of having an anonymous face-less assessment of tax, he said it is a great step.

Talking about the online assessment system he said, “A part of it was rolled out last year and another dimension was added to it, the tax officer’s identity will be anonymous, which to my mind will bring lot of clarity. The friction points or the pain points will be minimised, if not eliminated totally. But in this entire process I foresee equal participation from the tax payers also.”

He also mentioned that inter-changeability of PAN card and Aadhaar card is a great initiative that would boost tax compliance.

This budget has emphasised on widening of tax base, he said “We often hear demand for reduction of tax rates. But if we compare ourselves internationally I feel our tax rates are competitive. Though there could be a case of reduction, but it is not also be so that we keep on reducing the tax rates. What is more important is, the culture of paying taxes or tax compliance per say. Should be made in such a manner or the atmosphere should be created in such a manner that everyone feels like paying taxes.”