One nation, one tax

GIVEN how few voters enjoy paying them, politicians rarely trumpet the advent of new taxes. But the passage of a new goods-and-services tax (GST) in India’s upper house on August 3rd is a deserved exception. Well over a decade in the making, the new value-added tax promises to subsume India’s miasma of local and national levies into a single payment, thus unifying the country’s 29 states and 1.3 billion people into a common market for the first time. The government of Narendra Modi, never averse to over-hyping what turn out to be modest policy tweaks, has enacted its most important reform to date.

Few countries are fiddlier than India when it comes to paying taxes; the World Bank ranks it 157th out of 189 for simplicity. Both the central government and powerful state legislatures impose a dizzying array of charges. Because the rates differ between states, making stuff in one and selling it in another is often harder within India than it is in trade blocs such as NAFTA or the European Union. Queues of lorries idle at India’s state boundaries much in the same way they do at international borders.