1991 Economic Policy Essay
However, the long-term targets of the FRBMA are yet to be achieved, thus the following challenges and improvements are critical to assure the continuation and sustainability of this positive trend:
I. VAT implementation management
a. Continuing process of VAT implementation to all states
b. Careful management of CST phase out. CST is inconsistent with the concept of VAT, thus it needs to be phased-out. However, the elimination of CST will create revenue loss in the earlier periods, therefore careful management and planning in a form of temporary compensation for the states by the central government needs to be structured.
c. Closer watch on price due to possible tendency to raise price by the producer / seller
II. Accelerated improvements in tax administration to create impersonal, hassle free collecting mechanism and the optimization of the utilization of PAN.
Point I and II above will be major instruments to help reduce the high number of tax evasion in