Terming Kelkar panel's proposals as "radical", Finance Minister P Chidambaram on Saturday said a comprehensive tax reform will be implemented in the next Budget after a consensus from all sections.
"Now that Kelkar panel report is out, I urge upon you (industry) to set up groups and study the report. We have seven months for the next Budget. We can arrive at a consensus. If we can build up a sensible tax regime, it will be a major success story of 2005," he said addressing an Assocham seminar in New Delhi.
Kelkar's back! With more tax reforms
He said the Budget for 2004-05 stressed on agriculture and left tax reforms for the next Budget.
"The reason why I held back tax reforms in this year's Budget, was because the Kelkar Task Force was already going into the tax reforms," he explained.
The Task Force for Implementation of Fiscal Responsibility and Budget Management Act, headed by finance
minister's advisor Vijay Kelkar, submitted its report to the government on Friday.
The panel suggested hike in Income-Tax exemption limit to Rs 1.0 lakh, reduction in Corporate Tax rate to 30 per cent and a single countrywide goods and services tax.
The Task Force proposed a 3-tier Customs duty structure of 5.0, 8.0 and 10 per cent in a bid to bring down import tariffs to Asean levels.
The panel also proposed sweeping measures including removal of tax exemptions, simplification of tax procedures and reduction in cost of compliance to wipe out revenue deficit and lower fiscal deficit to less than 3.0 per cent of GDP by 2009.