Taxing times for the economy
Weak compliance, unresolved tax disputes and unrealistic tax targets threaten to hollow out India’s tax system
“When lots of people don’t pay tax or find ways not to pay tax, the burden comes on those who pay their taxes honestly. I want every Indian to introspect – do you accept this situation?" said Narendra Modi earlier this month. The Prime Minister’s appeal is a consequence of India’s slowing tax collections. In recent years, partly because of economic slowdown and partly because of changes to the tax system, India has struggled to raise taxes -- and this has severely constrained the government’s ability to reignite the economy.