Do away with transaction taxes

The government proposes to reduce the rate of Security Transaction Tax (STT), and reduce and enforce uniform stamp duties across the country. This is a step in the right direction. This should pave the way for removing these taxes altogether. Both are transaction taxes that are essentially distortionary and proposed not on grounds of equity or efficiency — they do not tax income or value added, but are imposed on grounds of ease of collection. In addition, the stamp duty differs from state to state.

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