Arvind Virmani, a member of India’s top policy think tank NITI Aayog, suggests simplifying India’s tax regime for small and medium businesses. Tax reform, including income tax, GST, and customs, is essential to ease the compliance burden on smaller companies.
Small and medium businesses (SMBs) constitute about a quarter of India’s economy and were severely affected by pandemic-related disruptions. Simplifying tax rates can enhance the efficiency of SMBs, promote competitiveness in imports, and improve export prospects.
Tax reform in India has several advantages, including boosting economic growth by reducing compliance burdens. When businesses face fewer compliance burdens, they can focus on investment and growth, leading to job creation and higher incomes.
Simplifying the tax code and reducing rates can enhance India’s competitiveness in the global economy, attracting foreign investment and boosting exports. Tax reform can also increase government revenue by encouraging greater compliance and tax payments from businesses.
India needs tax reforms to support small firms, create a business-friendly environment, and stimulate economic growth.
