Niti Aayog Advocates Modern Tax Framework for Trust-Based Governance

Niti Aayog calls for a modern tax framework emphasizing trust-based governance, which includes voluntary compliance, transparency, and fairness. Their paper supports aligning the tax system with the Viksit Bharat@2047 vision and reducing compliance burdens through interventions like 'Transparent Taxation – Honouring the Honest' and the Jan Vishwas Act.

On Friday, Niti Aayog made a compelling case for revamping India's tax framework with a focus on trust-based governance. The organization suggests that the approach should emphasize voluntary compliance, transparency, and fairness.

In its working paper 'Towards India’s Tax Transformation: Decriminalisation and Trust-Based Governance', the Aayog argues for aligning the tax framework with India's future vision based on growth, inclusion, and trust. The paper highlights the necessity of shifting towards a modern, predictable, and citizen-centered tax system to improve business and living conditions.

Moreover, Niti Aayog recommends that the government leverage initiatives like 'Transparent Taxation – Honouring the Honest' and the Jan Vishwas Act to reduce compliance burdens. It stresses that criminal provisions in the tax laws need careful evaluation to ensure they are legitimate and necessary, advocating for punishments that are proportionate to the severity of the infractions.