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Tax Reforms

Reforms in tax are connected with the reforms that were brought about in government taxation and public expenditure policies which are known collectively as fiscal policy.

Taxes can be divided into two types:
  • Direct taxes
  • Indirect Taxes
Direct taxes are the taxes levied on the income of individuals and on the profit of business enterprises. Since 1991, there has been a constant reduction in the taxes levied from individuals because it was agreed that high taxation caused a high rate of tax evasion. The reforms brought in moderate taxation and promoted savings and voluntary disclosure of income. The rate of corporate taxes have also been slowly but steadily reduced

Indirect taxes are the taxes levied on commodities consumed by the public. The reforms in this kind of taxation tried to facilitate the establishment of a common national commodity market. The reforms also simplified the procedures and compliances involved in the payment of taxes. Simplification was done in order to encourage the tax payers to pay the taxes and the rates were lowered to lessen their burden.

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