New Delhi, December 24 (IANS). The recent reforms under GST 2.0 (Goods and Services Tax) have made it clear that keeping taxes simple and low can also increase the government’s earnings (revenue growth). This was confirmed by a report that came out on Wednesday.
According to the report of Think Change Forum, it is more beneficial to increase the number of tax payers rather than increasing the tax rate.
It has been said in the report that earlier it was believed that the higher the tax, the more the government would earn. But recent data has proved this thinking wrong. GST collection increased to Rs 1.95 lakh crore in October 2025, which is 4.5 percent more than last year. This shows that people are now paying taxes more honestly.
According to the report, when there are a lot of small and informal businesses in the economy, tax paying habits matter more than the tax rate. Although India’s tax-to-GDP ratio is about 17 percent, the scope of direct taxes is very small and the country is more dependent on indirect taxes.
It has been said in the report that imposing too much tax causes people to start evading taxes. If taxes are kept low, more people pay taxes happily. The income from GST is increasing because gradually businesses are being registered on paper.
The report also said that there should not be a very high GST tax like 40 percent and the GST rates should be limited to only 5 percent and 18 percent.
Think Change Forum has suggested the government not to increase the highest tax rate further in the budget. Also, with the help of computers and technology, more people should be brought under the tax net. Imposition of tax on the basis of MRP should be avoided and the entire process of GST should be simplified.
The report also said that petroleum, electricity and other non-restricted items should be gradually brought under the ambit of GST so that the cost on the industry is reduced and the tax remains fair. Also, the government should take strict steps to stop black money, smuggling and tax evasion.
According to the report, strict steps should be taken in the budget against smuggling, illegal trade and tax evasion, so that honest tax payers do not suffer losses and everyone follows the rules.
–IANS
DBP/ABM