Look beyond calls for tax leeway, FM tells industry

Finance Minister Nirmala Sitharaman emphasized the need for industry and tax professionals to submit evidence-based ideas to enhance the tax system, along with an evaluation of any potential negative consequences. During a global tax conference in Bengaluru, Sitharaman cautioned against excessive criticism of economic growth, stating that India is weathering external challenges well and protecting its citizens from adverse impacts.

She encouraged tax experts to transcend sectoral representation and contribute independent policy research to public discourse. Sitharaman urged proposals to identify obsolete provisions and suggest better alternatives, while also detailing compliance requirements, beneficiary groups, and broader tax base effects. The government aims to minimize tax litigation by simplifying voluntary compliance and reserving enforcement for genuine cases, as evidenced by the Vivad Se Vishwas scheme.

Sitharaman highlighted the complexity of taxing the digital economy and cited ongoing discussions on crypto assets, where India plans to tax transactions at source until further stakeholder clarification. In the FY23 budget, a 30% tax on income from virtual digital asset transfers and a 1% tax deducted at source on all such transactions were announced.