Date:22/12/2004 URL: http://www.thehindubusinessline.com/2004/12/22/stories/2004122203080300.htm

Back `VAT key to revenue reform'

Our Bureau

Chennai , Dec. 21

THE Lead Economist of the World Bank's Delhi Office, Mr Stephen Howes, has said that shifting to value-added tax would be among the single-most important revenue reform for States.

At a workshop here on Tuesday, he said all State Governments need to introduce VAT at the same time and eliminate tax on inter-State exports regardless of VAT to "free the domestic market." At least those States that are prepared should shift to VAT and no individual state should have a "veto" right to prevent its implementation, he said.

Introduction of VAT should be on the basis of uniform floor rates rather than on uniform taxes.

To increase revenues, state governments should also implement tax administration reforms, which were as important as tax policy reforms.