Economist recommends single, uniform GST rate applied to all domestic consumption

Vito Tanzi, former Fiscal Affairs Director with the International Monetary Fund (IMF), has suggested that India replace the current multi-rate Goods and Services Tax (GST) slabs with a single uniform rate on all domestic consumption, and redistribute the entire revenue equally to every citizen as a per capita digital transfer via Aadhaar-linked accounts.

Prof. Tanzi was virtually addressing an international conference on Socio-Economic Impacts of GST organised by the Centre for Development Studies (CDS) here on Saturday. According to a statement issued by CDS, Prof. Tanzi invoked Leonardo da Vinci’s maxim -– simplicity is the ultimate form of sophistication — as the organising principle of a sound tax policy.

Prof. Tanzi said rather than embedding equity into a complex rate structure, India could achieve redistribution more effectively and transparently on the spending side — generating higher, stable revenue through a simplified GST and returning it directly to citizens.

The two-day conference, which concludes on Sunday, brings together academics, policymakers, scholars and practitioners to examine the impacts of GST reform across consumption patterns, fiscal federalism, State finances and broader socio-economic outcomes.