The Minister of State for Finance has urged state governments to focus on strengthening their tax base and taking effective measures to prevent revenue leakages. Improving the tax base is crucial for ensuring sustainable financial health and meeting the increasing demands of development and infrastructure projects. Revenue leakages can significantly reduce the resources available to states, limiting their ability to fund welfare programs and public services. The MoS highlighted the role of technology and data analytics in identifying gaps in tax collection and improving compliance among taxpayers. States are encouraged to simplify tax procedures, adopt transparent policy frameworks, and foster a culture of voluntary compliance to maximize revenue. Strengthening the tax base not only increases financial resources but also enhances fiscal autonomy, allowing states to undertake critical projects without heavy reliance on central transfers.
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