Question

Discuss any two liberalization measures pertaining to the tax reforms, introduced by the government, during the economic reform process of 1991.

Hint:

The 1991 reforms simplified tax structures and reduced rates to enhance compliance and boost economic growth.

Answer 1

Tax Rate Reductions: Corporate and personal income tax rates were lowered by the government to foster compliance and stimulate investment. Streamlined Tax Procedures: Reforms such as VAT and subsequently GST were implemented to simplify indirect taxes, mitigate cascading effects, and enhance transparency.