ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Case for an Expenditure Tax-A Comment

of the planning team, arises out of the financial implications of introducing block level planning at the same time throughout the country. In other words, greater justice could perhaps have been clone to the concept of block level planning by introducing it in a limited number of blocks in the first instance, instead of ambitiously attempting to cover all the blocks in so diluted IN spite of the discouraging experience of the working of an expenditure tax in India and Sri Lanka we do find occasionally people advocating its re- introduction in one or other form. Recently R J Chelliah has advocated, along with other measures, reintrodu- ction of an expenditure tax in India ("Case for an Expenditure Tax", January 26). This note tries to examine from a different angle whether there is any case for reintroduc- tion of on expenditure tax at this stage of our development. An effort is made to examine the validity of some of the widely accepted arguments in favour of an expenditure tax. Besides some theoretical issues, we also propose to discuss the administrative problems which are likely to arise in the course of the enforcement of an expenditure tax. The enforcement problems in taxation field are more important because bad administration of a good tax may have bad economic effects.

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