Finance Minister Pranab Mukherjee today expressed the hope that the Direct Taxes Code, DTC will come into force from April 1, 2012.
The code which brings together policy initiatives on direct taxes will modernise the tax laws.
Addressing an international conference on Tax and Equality in New Delhi today he said that government is moving towards a generalised value-added tax system of Goods and Service Taxes (GST) at all levels in the country.
While giving details of the tax reforms being pursued by the government, Mr. Mukherjee also called for greater international cooperation to deal with the menace of tax evasion and black money. He asserted that Tax evasion undermines the intended benefits of a progressive tax policy.
The Finance Minister added that resolution of these issues requires international cooperation and alignment of tax systems for better cross-border compliance.
Quoting global financial integrity report, Mr. Mukherjee said annual illicit outflows from emerging economies and developing countries average between 725 to 810 US Dollars billion.
Mr. Mukherjee said that his ministry has adopted a four-pronged strategy to deal with the issues of tax evasion and black money.
This includes joining the global crusade against black money and creation of a legislative and institutional framework to deal with illicit money. Although the strategy has started showing results the minister said that the complexity of cross-border transactions is on the rise and presents a serious challenge to tax administrators in practicing and bringing equality.
Referring to tax reforms within the country, Mukherjee said India has been pursuing them in a gradual manner.
The tax reforms, he added, are aimed at rationalisation of tax rates, broadening of the tax base, special focus on sunrise areas.
These areas include transfer pricing and international taxation, and strengthening of the tax information exchange network.
The government, he added, is also focusing on providing better taxpayer services, a reduction in the cost of compliance and focused enforcement in the case of high net worth individuals.
The progressive personal income tax policy, Mukherjee said, has resulted in a ten-fold increase in revenue collections, which went up from 8.62 billion in 1996-97 to 87 billion US Dollars in 2010-11.
