New Delhi: The government's tax proposals in Budget 2017-18 have tried to incentivise the first time taxpayers and rewarded honesty of those paying tax, said Finance Minister Arun Jaitley after his post-budget interaction with media.
"I have rewarded honesty....have tried to bring in the non-filer of taxes into the filing category", said Arun Jaitley, adding that so far, small taxpayers were paying the burden of tax evaders. Digitisation is going to improve government's revenue. People are going to disclose more, I see a lot of gain in personal income tax, he said.
Calling the country as "largely a non-tax compliant society," during his Budget speech in Parliament, Finance Minister reduced the base tax rate to 5 percent from the earlier 10 percent on income of between Rs 2.5 lakh to Rs 5 lakh. He also announced tax exemption on income up to Rs 3 lakh per annum.
The majority of taxpayers in India fall in the tax slab of Rs 2.5 lakh to Rs 5 lakh. The Finance Minister added that it is the first Budget in our country’s history in which every taxpayer’s tax has reduced. "Those falling in tax slab of more than Rs 5 lakh will also have an annual benefit of Rs 12,500", he said.
On the absence of any cut in the corporate tax rate in the Budget, while MSMEs receiving a reprieve on income tax, Jaitley said that large companies are anyway paying only 25 percent corporate tax after benefiting all the other exemptions. MSMEs are expected to become more competitive with income tax coming down to 25 percent. Finance Minister hoped corporate tax collection to get better as health of companies improves in the coming days.
Finance Minister also clarified that he does not plan to remove exemptions given to the industrial sector anytime soon. "I can't phase out exemptions given to industries as companies are not in the best of health", said Jaitley.
On divestment of PSUs, the Finance Minister said that government is divesting more and making less noise, and hoped to follow better divestment calendar in the coming days. "NITI Aayog has made a long list, we will buy back in case divestment appears impossible. Without making confrontation, we are divesting more than making more noise....we are expecting to divest government's stake in the public sector general insurance companies up to 74 percent by this time, said the Finance Minister. He added that government has already collected up to Rs 31,000 crore through divestment route.
Jaitley did not deny that surge in global oil prices and protectionist policies of the US President were kept in the larger picture while putting down the Budget 2017-18. When we talk of high growth rate, we also have to see the supporting global environment, he said.
Maintaining the economic momentum, cleansing political funding, giving reprieve to taxpayers, and bringing tax evaders under the tax net were part of the thought process behind the Budget 2017-18, said Jaitley.