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November 12, 2007 19:14 IST
Government is likely to come out with a draft Direct Taxes Code by December-end that will eventually replace Income Tax Act, Wealth Tax Act and other legislations on direct taxes.
"We will put the code in the public domain by the end of the year to invite comments from the public," Finance Minister P Chidambaram said at the Economic Editors Conference in New Delhi.
The code is expected to simplify the procedures for imposition and collection of personal income and corporate taxes as well as other direct taxes.
Replying to a query on restructuring duties on petroleum sector to prevent any hike in prices of petroleum products, he said, "if we cut taxes on petroleum goods, then we will have to raise taxes elsewhere."
A tax cut could also lead to increase in consumption of petroleum goods, he said, adding the matter has to be considered in its totality.
Chidambaram said the United Progressive Alliance government has reduced taxes on petroleum products more than any other government in the past.
For instance, he said, the UPA government has eliminated the customs and excise duties on kerosene and LPG, changed the duty on diesel from ad-valorem to specific.
He also said the government is bound by targets specified by the Fiscal Responsibility and Budget Management Act.
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