Union finance minister Arun Jaitley said on Monday that India needed to move to a lower level of globally compatible taxation to make the country competitive.

“What you need is a broader base of economy for which you need a lower level of taxation. You need to manufacture products and provide services, which are more competitive in character. Therefore, your taxes have to be globally compatible,” Mr Jaitley said while inaugurating a training session for Indian Revenue Services officers in Faridabad.

Tracing the behaviour of people in the last 70 years, the finance minister said that there had been an impression that tax evasion was not improper or immoral. It was considered to be commercial smartness, and some people have faced serious consequences because of this, he said.

According to sources, the Budget will mostly deal with direct taxes, and there may not be a scope to tinker with indirect taxes as the GST Council is discussing them to roll out the much-awaited GST. Any change in indirect taxes may only be proposed and discussed in the GST Council now.

He said that there was an urgent need for a mindset change, and India had to move towards voluntary compliance. He said that the payment of legitimate taxes should be considered as part of the process, and nobody should think that tax evasion was acceptable. He pointed out that tax payment was every citizen’s responsibility.

“It should be reciprocated by you with a confidence in the taxpayer. The taxpayer is to be trusted, except when it’s proven otherwise. And therefore only in those select cases, very objectively selected, you go in for a wider audit or a wider scrutiny,” Mr Jaitley told the officers.

He also spoke of the importance of co-ordination between the central and the state administrations for a smooth transition from the old to the new indirect tax so that taxpayer did not suffer.