Tax Reforms - Taxes Without Tax Laws

Abstract

This paper suggests a new tax system without multiple taxes, tax laws, tax returns, tax collection departments, tax tribunals and tax enforcement agencies. In this new tax system, citizens need not maintain separate account books and submit tax returns annually for paying either Direct taxes on personal incomes or Indirect taxes while running business or industry. The present day trade barriers between manufacturers and consumers; between the states within the country and between the nations can be totally removed. Yet, this new tax system envisages 20 to 30 % more revenues than presently accruing from multiple Direct and Indirect taxes collected by different tax collection departments/agencies. It suggests a single tax called “TOP Tax” (Transfer Or Purchase Tax) for both Centre and States combined in place of present multiple Direct and Indirect taxes with different slab rates on different goods/commodities/services and multiple Direct taxes with different slab rates, relieving 7 billion people of the world from the cobweb of ambiguous and complex tax structures, plethora of tax laws, mandatory and cumbersome accounting, auditing, tax returns and consequent quagmire of all tax related cases. Taxation, tax collection, tax enforcement, tax compliance, allocation of revenues to various ministries or departments and money supply into the economy are unified and integrated in the banking system. This paper vividly explains how this new tax system can be operated solely by banks at minimum operating cost with limited physical currency (0.3%) and non-physical money (99.7%) of the total money supply available in the economy in the particular country, while totally eliminating black money, tax evasion, fake currency, corruption and extortions.