Why not do away with personal income tax

Taxes can be replaced with Bank Transaction Tax

GN Bureau | December 8, 2017


#ArthaKranti Pratishthan   #income tax   #Bank Transaction Tax   #budget  


The pre-budget days are here again and there cannot be a better time than this to once again seek an end to personal income tax.

 
Ending taxes on personal income will be a big relief to the senior citizens and the salaried people. There are alternatives to raise revenue and those need to be carefully explored. The government can also look at hiking indirect taxes to mop up the shortfall.
 
ArthaKranti Pratishthan, a Pune based NGO, which is credited with recommending demonetisation to weed out black money, has repeatedly demanded complete abolition of taxes, direct and indirect by the central or state governments and also the local bodies.
 
 
It suggested that the taxes be replaced with Bank Transaction Tax (BTT). The idea was that inward bank transaction would attract a levy and it would be a single point tax deducted at source.
 
This deduction is to be effected on receiving/credit accounts only. This deducted amount will be credited to different government levels like central, state and local (say 0.7%, 0.6%, 0.35% respectively). Transacting Bank will also have its share in this amount as the bank has a key role to perform (say 0.35%), said ArthaKranti.
 
Assocham has recommended that tax exemption limits for senior citizens and salaried employees should be also raised substantially for a demand push to the economy.
 
Assocham president Sandeep Jajodia said in his presentation before finance minister Arun Jaitley that senior citizens and salaried employees are particularly affected by rising prices of essential commodities and deserve relief. This would not only give a push to the consumer demand but also promote personal savings.
 
He added that corporate tax should be reduced to 25% as committed by the government earlier, to encourage investment by domestic and foreign companies. 
 
Niti Aayog too has recommended keeping tax levels moderate in order to tackle black money.
 
“Structural changes to reduce flows of black money will involve keeping tax levels moderate and tax administration simple and transparent, and reforms in real estate transactions, including seeding of Aadhar and moderate stamp duties,” said Niti Aayog’s Three Year Action Agenda .
 
It said that the government must frontally address the problem of corruption among tax officials. Cases of corruption among tax officials must be prosecuted and disposed swiftly since without instilling honesty among officials in this area we cannot curb the generation of black money.
 
In 1997-98, P Chidambaram while delivering the budget speech said: “I believe that a good tax policy should aim at moderate rates, a wider tax base, simpler procedural rules and securing greater compliance.”
 
 The 1997-98 budget was described as a dream budget as it presented a road map for economic reforms in India and included lowering income tax rates, removal of the surcharge on corporate taxes, and reduced corporate tax rates.
 
To rationalize taxation in India, the government had set up a high powered committee in August 1991, under the chairmanship of Raja J. Chellaiah. The Chellaiah committee had made recommendations for a comprehensive reform of the system of central taxes.

 

Comments

 

Other News

PM Surya Ghar: Muft Bijli Yojana completes first year

On February 13, 2025, the PM Surya Ghar: Muft Bijli Yojana (PMSGMBY) will mark its first anniversary, celebrating a year of empowering households with affordable solar energy and accelerating India’s transition to a sustainable future. Launched by prime minister Narendra Modi on Febru

How to leverage AI to solve urgent global issues

The world seems to be hurling towards World War III in all the possible scenarios: hot war, cold war, and proxy war. The battleground seems to have expanded beyond physical to digital or virtual/mixed reality with technology like drones. Moreover, the line between civilian and military targets seems to hav

Budget: Progress towards SDGs and areas for improvement

The Union Budget 2025-26 outlines India`s vision for economic and social growth while also reflecting the country`s commitment to sustainable development. As India moves closer to the 2030 deadline for the United Nations’ Sustainable Development Goals (SDGs), this budget presents a balanced approach

Repo rate cut by 25 basis points to 6.25%

The Reserve Bank of India has, for the first time in five years, reduced the policy repo rate under the liquidity adjustment facility (LAF) by 25 basis points to 6.25% with immediate effect. Consequently, the standing deposit facility (SDF) rate will stand adjusted to 6.00% and the marginal

Amitav Ghosh’s new work: Connections between the word and the world

Wild Fictions: Essays By Amitav Ghosh HarperCollins, 496 pages, Rs 799.00 Amitav Ghosh, one of a handful of Ind

How markets can help (and also hinder) fight against pollution

In the annals of environmental policy, few ideas have been as transformative as the Emissions Trading System (ETS). Born from the minds of economists in the late 1960s, this market-based approach to pollution control has evolved from a theoretical concept to a global tool in the fight against climate chang

Visionary Talk: Amitabh Gupta, Pune Police Commissioner with Kailashnath Adhikari, MD, Governance Now



Archives

Current Issue

Opinion

Facebook Twitter Google Plus Linkedin Subscribe Newsletter

Twitter