Rethinking India’s tax system4 min read . Updated: 26 Dec 2017, 04:58 AM IST
Indian states should rely more on property tax, which is economically efficient, incentive compatible, and progressive
There is a fundamental problem with India’s current tax system. India simultaneously has a tax base for direct taxes that is too small; and a tax base for indirect taxes that is too large. Consequently, too little tax revenue is raised; and too much of the tax burden is paid by the poor. This limits the state’s ability to provide the infrastructure and manpower required for good governance.
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