Research body for simple tax system

Pune-based research organisation Arthakranti Pratishthan has welcomed the decision of Reserve Bank of India (RBI) to withdraw all currency notes issued prior to 2005. The NGO has termed the decision as an acknowledgment of the fact that fake currency is a problem. 

It also expressed the need on the part of Union finance ministry to further this action by improving tax structure and system for preventing generation of black money.

RBI on Wednesday had decided to withdraw all currency notes issued prior to 2005, including Rs500 and Rs1,000 denominations, starting March 31. The step was aimed at curbing black money and fake currencies in the country.

The NGO trustee Anil Paranjpe said that withdrawal of high denomination currency is one of the proposals of Arthakranti and we are happy that RBI has taken at least the first step.

He said that it is difficult to estimate the possibility of fake notes in circulation since as per the government estimation, 18% fake currency notes could be in circulation. 

He pointed out that this estimation is based on the number of seized fake notes as compared to transacted currency notes and that is the reason the actual number of fake notes could be much higher to even anything between 10 to 30 per cent. 

He said that there is a need for making tax system simpler otherwise black money would continue to generate as people would prefer tax evasion than being honest taxpayers just for the want of simpler tax system and finance ministry can play its role in this regard.