Dikhyaa Mohanty 
The Odisha Cabinet has decided to promulgate an Ordinance to amend the Odisha State Tax on Professions, Trades, Callings and Employments Act, 2000, effectively paving the way for the abolition of Professional Tax in the State. Since the Odisha Legislative Assembly is not in session, the government has invoked Article 213(1) of the Constitution to bring this reform through an Ordinance. The move aims to reduce the compliance burden on citizens and businesses while promoting ease of doing business.
The Act, which was passed in 2000 to increase state income, levied a maximum Professional Tax of Rs 2,500 annually on a variety of professions, such as physicians, consultants, agents, salaried workers, dealers, and businesses. The maximum sum had to be paid by non-profits and small businesses with little to no turnover. The state’s professional tax income in 2024–2025 was Rs 316.97 crore, or around 0.56 percent of its total tax collection. Officials pointed out that the little money received is far outweighed by the significant administrative costs of assessment, collection, and enforcement.
After eight years of GST implementation, the Professional Tax charge is also viewed as being in odds with the tenets of “One Nation, One Tax, One Market.” Contrary to the state’s efforts to foster a business-friendly climate, it has placed an unwarranted compliance burden on start-ups, small businesses, and Micro, Small, and Medium Enterprises (MSMEs).
Millions of professionals, small companies, and salaried workers are anticipated to benefit from the proposed ordinance. Following the Ordinance’s publication, more information regarding the effective date and procedures will be announced.This choice demonstrates the government’s dedication to streamlining the tax system and promoting economic expansion in line with Viksit Odisha’s overarching goals.
