'Vietnam collects more at 8% than India does at 28%': Shashi Tharoor slams GST structure, calls it 'most complex in the world'

Congress MP Shashi Tharoor on Monday tore into the government's economic strategy, calling the Finance Bill a “classic case of patchwork” and branding India’s GST as the “most complex tax in the world.” Speaking during the Lok Sabha debate, Tharoor argued that the government's reforms lacked clarity and failed to address deep-rooted structural challenges.

“The Finance Minister’s budget speech in this house reminded me of the garage mechanic who said I couldn't fix your brakes, so I made the horn louder but looking at the Finance bill, she is now saying to taxpayers, I couldn't repair the roof but I brought you an umbrella,” Tharoor said. “This Finance bill is a classic case of patchwork solutions.”

Calling India’s GST structure confusing and inefficient, Tharoor said, “Instead of the good and simple tax we all wanted, India has multiple and confusing GST rates, including the highest GST rate in the world, at 28 per cent but tax revenues are still at 18 per cent of GDP.”

He drew comparisons with other countries, adding, “China has 13 per cent GST cap, but they collect 20 per cent of GDP. Vietnam has an even lower 8 per cent cap and collects 19 per cent of GDP. Thailand, GST is only 7 per cent, and they get a net 17 per cent of GDP. Now, beyond exorbitant rates, our system carries a dubious tax, the dubious burden of being the most complex tax in the world.”

He further stated, “77 countries have GST, and they impose only one or two tax labs. This multi-rate structure in our country has further raised the compliance burden for businesses.”

Responding to the Congress MP, BJP’s Nishikant Dubey defended the government’s economic record. “It is a known fact that the country's economy which was worth USD 2 trillion has increased to USD 4.5 trillion in the last ten years,” he said. “It is Congress' agenda to oppose everything without looking at the positives.”

Congress MP K C Venugopal also joined the attack, alleging that corporate loans worth Rs 18 lakh crore had been written off. In response, Union Finance Minister Nirmala Sitharaman clarified, “Written off does not mean that the money has been given away. The government is following up with cases.”

(With inputs from PTI)