TAX REFORM FOR DEVELOPING VIABLE AND SUSTAINABLE TAX SYSTEMS IN INDIA WITH SPECIAL REFERENCE TO GST

Most developing countries continue to face severe issues in developing adequate and quick to respond tax systems. While each of these paths to reform is necessary, in the end what 50 years of experience tells us is that improving the precision and understanding with which fiscal issues both within and outside government, is the really essential ingredient to developing viable and sustainable tax systems in developing countries like India. Indian taxation system has undergone remarkable reforms during the last decade. The tax rates have been rationalized and tax laws have been simplified resulting in better compliance, ease of tax payment and better enforcement. The process of validation of tax administration is ongoing in India. Another key objective of tax reform measures has been to increase total tax to GDP ratio as a means of achieving fiscal con¬solidation and improving resource allocation. GST, easier tax filing methodology and simpler tax structures ? Government of India is working to enhance the government's revenue collection, at the same time ensuring that cumbersome taxes do not deter investors. This paper review the three principal ways in which developing countries like India may develop and progress their taxation systems - base-broadening, rate reduction, and administrative improvement - in the context of the political economy of tax reform.