Budget 2020: Reforms for a sustainable economic growth

Budget 2020: Reforms for a sustainable economic growth

Representative image (Getty images)

By Daksha Baxi

"Measures are needed to spur export activities rather than reduce any taxes: there are a number of reasons why exports are not happening. These need to be urgently identified and difficulties removed. Provide incentives by way of cost reductions for export inputs. Ground-level compliance and regulatory difficulties are a major reason for lack of small industries not being set up. The areas, sectors need to be identified and processes streamlined, made transparent for activities to take place. Tax is not the only incentive. As soon as tax incentives are introduced, there would be litigation since people would be creative to seek the incentives and tax officers will deny them.

 Most important is to make tax compliance easy, hassle-free and transparent. The same way regulatory compliances also need to be easy and transparent. Land acquisition and land leases, licenses need to be made easy and stamp duties need to be reduced. AOP tax needs to be dismantled as it renders itself to huge litigation, especially for EPC.

Agro-based industries need to be given infra status to get more benefits

Farmers who travel abroad and have expensive cars + financial investment above a certain threshold should be taxed on their agricultural income at the lowest tax rate.

 All tax provisions should be drafted such that no substantive change is made for at least 3 years. The only changes should be made is clarificatory for removing difficulties in implementation."

(Daksha Baxi, Head - International Tax, Cyril Amarchand Mangaldas)