Neo-liberal policies have enhanced the scope and opportunities of taxation for the government. Explain. (Answer in 150 words)

- Neo-liberal policies have enhanced the scope and opportunities of taxation for the government. Explain. (Answer in 150 words)
Introduction
Neo-liberal policies, introduced since the 1990s, emphasize liberalization, privatization, and globalization (LPG). Contrary to reducing state intervention, they have expanded the scope of taxation by widening economic activity, formalizing markets, and integrating India with the global economy.
Body
1. Expansion of Tax Base: Economic liberalization boosted industrial growth, services, and foreign investment, increasing taxable income and corporate profits. The rise of organized sectors enhanced direct and indirect tax collection.
2. Structural Reforms: Tax reforms like GST (2017) and Direct Tax Code initiatives simplified structures, reduced evasion, and promoted compliance through digital systems such as TDS, PAN, and e-filing.
3. Globalization and Digital Economy: Cross-border trade and digital services led to new tax avenues—customs duties, equalization levy, and international taxation of MNCs.
Conclusion
Thus, neo-liberalism, by fostering economic expansion and formalization, has strengthened the state’s fiscal capacity and diversified taxation avenues, enabling governments to sustain welfare and infrastructure spending.