News Karnataka
Friday, December 09 2022
Opinion

Arthakranti: It’s time for change in taxation

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Today, each of us complains that although the country seems to have everything in place, there is something wrong somewhere! Whether in the newspapers, news channels, or magazines, the picture is always about either corruption or exploitation of the common man. Our country is facing innumerable problems, but no one knows the exact solution to them. The blame is put on politicians and the bureaucracy. Today, there is a gut feeling of helplessness that no good changes will ever take place in the country. Our country is facing innumerable difficulties like poverty, inflation, corruption, economic disparity, lack of capital, lack of funds for basic needs like education, health resulting in low standard of living.

‘Arthakranti’ provides the solution to every problem the country is facing and hence there is need for each of us to understand exactly what ‘Arthakranti’ is.

Arthakranti Pratishthan has put forward this studied proposal before the govt. The agenda is as follows:

1. Withdrawal of existing tax system. (Except for import duty and excise duty):

Income tax, service tax, sales tax, registration tax etc should all be abolished.

2. Every bank transaction will attract certain deduction, say 2% as uniform ‘bank transaction tax’ as a single point deduction revenue. Every transaction done through banks will attract a small tax (say 2%) to the receiver’s account. This tax will be divided into 0.7% for the Central government, 0.6% for the State government, 0.35% for the local authority and 0.35% for the banks.

3. Withdrawal of high denomination notes of Rs 1000 and Rs 500:

(Before this step is taken, all citizens could be given an opportunity to deposit all their black money into their accounts without any penalty being levied thereon, or without any inquiries being made. This amount will only attract a bank charge of 2%. Afterwards, these high denomination notes will be withdrawn)

4. No tax on cash transactions. (Thus the poor will not have to pay any taxes. Today, a poor man pays an indirect tax even on a packet of biscuits.)

5. Cash transactions up to a certain limit (say, Rs 2000) will be enjoy legal protection; beyond this, cash transactions will be considered for legally un- protectable. (This will lead to huge increase in bank transactions and the income accruing from them.)

Bank Transaction Tax (BTT) will lead to the following changes:

i. The income from taxes will be doubled: (Today, the tax collection at the Centre is Rs 14 lakh crores, the states together earn Rs 6 lakh crores and the local authorities collect Rs 2 lakh crores, a total of Rs 22 lakh crores. Today bank transactions amount to Rs 900 to Rs 1000 lakh crores. This it will fetch a BTT of Rs 20 lakh Cr. Once notes of Rs 1000 and Rs 500 are abolished, bank transactions should increase to about Rs 2000 lakh crores, on which the government will get Rs 40 lakh crores at 2% BTT. Thus today’s income will be doubled.

ii. The stoppage of black money will control corruption.

iii. Once all black money is brought into circulation, it will be a big blow to the parallel economy in the country today and also get rid of the problem of inadequate capital.

iv. The budget will have a surplus and the country will be free from debt.

v. Once all taxes are abolished, prices of diesel, petrol, steel, cement, electricity and such other commodities will come down by 15 to 25%. Transport cost will be reduced leading to cheaper commodities.

vi. With a regular income, banks will become economically stronger and the interest rate will come down to 3 to 4%.

vii. Due to a surplus budget, the government will be able to invest more into basic needs like education, health, agriculture, services, construction and other such spheres. This will lead to more employment and industries.

viii. The government can earmark a certain ‘election fund’ for the various political parties as per the votes they have got earlier. This will help to reduce the power of black money and cleanse politics and political crimes.

ix. FDI will no longer be needed.

In short, all the problems facing the country will, to a large extent, be solved.

This proposal has already been submitted to the government. What is required today is political will and some tough decisions. To this end, the government should appoint a committee with statutory powers and ask for suggestions from the citizens as well. Citizens themselves should pressurize the government to bring about a change in the tax structure of the country.

The day is not far when elections will be fought on the issue of “change in the tax system”.

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