Periodic international dialogue on economic concerns desirable: Mukherjee

New Delhi, Dec 7 (ANI): Union Finance Minister Pranab Mukherjee on Wednesday said that it is desirable to have a periodic international dialogue on economic concerns that affects lives in all countries.

Inaugurating the Fourth International Tax Dialogue Global Conference on "Tax and Inequality," Mukherjee said the present phase of globalization has brought us closer to each other, than any point in the history of human civilization. Our opportunities are getting increasingly tied together and so are solutions to many of our common problems."

Stating that the intricate relationship between growth and inequality poses challenges for the formulation of tax policy in both developed, as well as developing countries, Mukherjee said that on the one hand, progressive tax policy is a means to address growing inequalities in incomes and wealth and on the other hand, it provides resources to address the structural issues in inequality and poverty.

He also said that it facilitates the implementation of public programmes and expenditure policies for capacity building of the less fortunate individuals and communities within countries.

"At the same time, tax policy has implications for incentivizing economic activity, savings, production or consumption, and hence growth. It is thus a vital instrument of public policy and has to be carefully used," he added.

Emphasising that that principles of horizontal and vertical equity are important if a tax system is to be seen as fair, Mukherjee said that tax administration, which includes mechanisms to register taxpayers, collect revenue, enforce compliance and provide redress when required, also has a direct bearing on fairness of tax policy.

"A good tax policy if not administered properly may result in a distribution of the tax burden very different from that which would occur if the tax code was administered effectively," he added.

Asserting that the complexity of cross border transactions is on a rise and presents a serious challenge to tax administrators in practicing and bringing equality, Mukherjee said: "The opacity of tax systems in some of the jurisdiction is adding to the challenges."

"There has been some movement on these issues in response to the initiative by G-20 but we need to pursue this to its logical end," he added.

Welcoming the participants, Mukherjee said that India is delighted to co-host this conference and expressed happiness over the international tax dialogue joining hands with the Ministry of Finance in organizing the conference.

He said that the Conference has brought together an impressive panel of stakeholders to deliberate on tax matters by involving national tax officials, international and regional tax organizations, policy makers and experts from around the world. (ANI)