Economists favour tax status quo

Top economists of the country today asked finance minister P. Chidambaram not to cut personal income tax rates.In a pre-budget meeting, they suggested that despite a huge rise in revenue collections, personal income tax rates should not be cut. However, they expressed the need to rationalise excise duties and slash mounting subsidies.The finance minister last week said there could be “a case for moderation” of rates if voluntary compliance increased. The country’s personal tax collections have risen 50 per cent between April and December compared with the same period a year ago.Rajiv Kumar, director at the Indian Council for Research on International Economic Relations, said, “We suggested that the government should not touch personal income tax rates. If you have buoyancy in tax revenues, it should be used to increase infrastructure spending or rationalise indirect taxes. – www.economicstimes.com