Official sources told PTI that the reports, which would contain far-reaching recommendations on simplification of taxes, are also expected to contain measures to do away with most of the exemptions. Finance minister Jaswant Singh has already indicated he would give top priority to economic reforms including tax reforms and the taskforces headed by his adviser Vijay Kelkar would submit their reports this week.
The report on direct taxes might not contain any suggestions to tinker with present rates of 10, 20 and 30 per cent on personal income tax, the sources said adding on the indirect tax, it might suggest lowering of peak customs duty from 35 to 25 per cent on finished products. On raw materials it could be 15 per cent.
These reductions in customs duty could be suggested as an intermediate step towards moving on the two rate customs duty structure of 10 per cent on raw materials and 20 per cent finished products in 2004, the sources said. On excise duty it would lay the roadmap for moving towards a single rate excise duty with the introduction of VAT from April 1, 2003.