In this paper we will provide a possible picture of direct tax in the 2008 budget. The tax burden will not increase and more stress will be given on voluntary tax compliance. Service tax on the amusements parks may be imposed.
The tax department will be emphasizing more on the voluntary tax compliance.
According to some experts, the tax regime should be simple and a taxpayer friendly tax administration is required for compliance.
In a country like India where the government has not been able to provide the basic needs of the citizens fully, extra care should be taken for the tax payers. Some economists think that the tax payers ought to be rewarded and they also vote for a three fold moderation of the tax rates.
Director and Chief Executive Officer of ICRIER Mr Rajiv Kumar advises the Finance Minister Mr P. Chidambaram not to alter the rate of corporate as well as income tax. He argues that buoyant tax collections are not same as the minimization of tax rates, but the government can use the money for infrastructure development. He also suggests to rationalize the excise duties in the oil sector.
In the 2008 budget, a proposal will be given by the government to impose service tax on the amusements parks and the coin operated amusement machines. However, the small service providers will not be included into the scope of this service tax.
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