Reducing tax rates on individuals can help them in increasing their savings, thereby helping them to spend more, which in turn can help in boosting the economy. You can read about the Tax Administration Reform Commission (TARC) – Mandate, Report, Recommendations in the given link.
Tax reforms can be highly complex. When tax rates are cut for corporations, it will help them to invest more in the economy thereby boosting the economy of the nation. Tax cuts can also reduce Government earnings, thereby impacting the expenditure of Government on social welfare schemes, infrastructure etc.
Further readings:
- Tax Policy Council & Tax Policy Research Unit: Notes for UPSC
- Taxation in India – Direct taxes & Indirect Taxes, Features of Taxation System
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