Tax compliance a must while pushing digital economy: Ravi Shankar Prasad

India revisited whole agreement with Cyprus, Switzerland to ensure tax compliance, says Prasad

Law and IT Minister Ravi Shankar Prasad on Friday called on tax practitioners and administrators to keep tax compliance in mind as India's digital economy expands.

"We are creating a big ecosystem of digital economy. Indian digital economy is going to become a $1 trillion economy in the coming five years," Prasad said while speaking at a conference on tax system.

The digital economy includes communications services, IT and IT-enabled services, e-commerce, manufacturing and digital payments.

"In this ecosystem, surely issues of tax, compliances, border or no border will come. That is one area I would expect that sometime in future you people need to reflect, act and also give feedback as to how we can promote digital economy without disturbing innovation and enterprise while ensuring tax compliance," Prasad said.

He said that government is working very aggressively to ensure there is tax compliance in the system.

Prasad said that Prime Minister Narendra Modi has taken lead in convincing the world that things have to be operated in a fair and transparent manner.

"If some people seek to tinker with the system there must be a mechanism available for automatic sharing of information. America has followed it immediately. Our PM went to Switzerland, they also agreed to open up," Prasad said.

He said that India revisited whole agreement with Cyprus, Switzerland to ensure tax compliance.

"The tax practitioners and tax administrators will have to understand tempo of this change. If you are unable to understand this change I am sure something is lacking in the approach of tax practitioners and tax administrators," Prasad said.