Mumbai: Terming tax-paying as a “patriotic duty”, Finance Minister Arun Jaitley today said given our aspiration to be a dominant player on the world stage, we cannot afford to be a place where the shadow economy is bigger than the real economy.
“You can’t have an economy where the size of the shadow economy is much bigger than the apparent economy itself,” Jaitley said in Mumbai this evening.
Without naming the note-ban and GST rollout, both of which have slowed down the economic engine, he said the process of making a cleaner economy is set in motion to achieve the aspirations like being a developed economy and the fastest growing among major economies of the world.
While addressing an awards function in Mumbai, he said the government has been taking steps “one by one” towards this direction and some impact is already visible like an enlarged tax base, jump in digital transactions and squeezing out cash from the economy.
Conceding that there will be some “noise and grievances” because of the implementation of tax reforms like GST, he said paying taxes is essential.
“Paying taxes is always a fundamental duty of every citizen. It’s a patriotic duty to be a part of that structure, rather than outside the structure. It is only then that the implementation will really show its larger, longer-term
impacts,” he said.
It can be noted that the note-ban and the hasty rollout of GST are the main reasons for the sluggish growth, with the GDP growth falling for sixth straight quarters to 5.6 per cent in the June quarter.
Without mentioning any specific criticism, he asserted that tax rates in the country are the lowest in the world and added that this will help the agenda of widening the tax base.
On direct taxes side, he said government has reduced them in such a way where the lowest tax slab is 5 per cent, while on the indirect tax side, it is as low as 1 per cent.