Reserve Bank Deputy Governor Rakesh Mohan on Friday asked industry chambers not to clamour for tax
rate cuts, saying the rates were already moderate by international standards.

"I was surprised by the Chambers asking for more tax reductions while simultaneously asking for more expenditure on
infrastructure," he said at a book release function at the Indian Merchants' Chamber in Mumbai.

Interestingly, Finance Minister P Chidambaram himself had hinted at further moderation of tax rates while addressing the
Economic Editors' Conference last month, but added that this depended on greater tax compliance.

"I have not put any time-frame on moderation of tax rates," Chidambaram had told reporters in Mumbai on Thursday when asked by when the rates would be rationalised.

According to Mohan, there was now a need for an efficient and automatic system for collection of taxes. He highlighted
the model of tax deducted at source as an ideal way of collecting taxes.

Mohan described TDS as a painless method of collecting taxes and urged industry chambers to devise methodologies on the lines of TDS for tax collection.

It is always painful to pay taxes after the money comes into one's bank account, but if it is deducted before being
credited to one's account (as in the case of TDS), then it is not as painful, he said.

On the large number of tax exemptions that now existed, Mohan described them as 'frightening' and said that such a
large number of tax exemptions were not good.