Is there a case for abolition of the direct tax in India and replace it with, in absence of any currently known alternative, a Banking Transaction Tax (BTT)? Another feature of direct tax collection is that it is highly skewed towards the end of a financial year, in March with a mid-year spike in September. But according to National Institute of Public Finance and Policy, while some Latin American countries do have BTT, they haven't replaced direct tax. Moreover, the effective tax liability of the tax would be considerably higher than the proposed headline rate of 2%. The effective rate of tax for organised manufacturing comes to 14.3% with a 2% BTT, where a range of activities would have effective tax rates higher than 20%.

Source: dna January 30, 2018 00:22 UTC