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

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TAX BUOYANCY-Beyond Compliance

excessively over-centralised tax-sharing arrangement. The formula by which the commission decided that not 27 per cent, not 25 per cent either, but exactly 26 per cent would be the prerogative of the states under the proposed new fiscal system is not easily explicable. Given the fast pace at which the country's political map is getting altered, it would be no surprise if sooner or later, sooner probably than later, the states demand in unison that the yield from all taxes levied by the centre should be shared with the states on a 50:50 basis. After all, as early as in the early 1970s, the CP1(M) actually went to town in West Bengal with the electoral slogan of a three-fourths allocation for the states from the central tax kitty. Some chief ministers might in the coming years not be averse to suggesting that, with the corporation tax and taxes on foreign trade, they would not mind a pooling arrangement as per the recommendations of the Tenth Commission, but what the share of the states would be from out of this pool was to be a matter for settlement in the political arena.

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