Pune-based outfit suggests tax reforms to BJP leader Gadkari
One of the several tax reform proposals before the BJP Parliamentary Board recommends abolition of the more than 30 local, State and Central level taxes levied at present. The proposal recommends that from the present tax system only import duties should be retained. The proposal received by former BJP president Nitin Gadkari from a Pune-based tax research outfit recommends replacing the present tax system with a single 2 per cent levy per receipt in bank accounts.
The proponent of the tax reform, Arthakranti, made a presentation to journalists on it at Mr. Gadkari’s residence here on Tuesday. He heads a committee that is preparing a vision document for the party on reforms in five areas — police, administration, judiciary, taxation and education. “This innovative tax reform proposal is aimed at reducing corruption and eliminating the cost of compliance for tax payers,” a highly-placed source told reporters at the meeting facilitated by Mr. Gadkari.
“A single income tax raid/search/seizure results in a loss of at least Rs. 15 crore to the taxpayer being scrutinised.” The proposed tax can be collected through the banking channel rather than tax collection authorities.
“The proposal is to not tax consumption or income as is the case at present, but tax the velocity of money,” said Arthakranti’s Anil Bokil. “Even in the U.S., a senator from Hawaii has introduced a private member bill on a similar concept.”
The tax reform proposal will not lead to a loss of revenue for the government, the source said, adding that it will plug tax evasion and avoidance. Mr. Bokil said that, Arthakranti’s calculations show that the 2 per cent tax will yield Rs. 40,00,000 crore. Eminent economist and former secretary-general Ficci Rajiv Kumar, also present at the meeting contested the calculation. According to Mr. Kumar, at 2 per cent the proposed new tax will yield about Rs 14, 00,000 crore. In 2012-13, the Centre’s total tax revenue (Revised Estimates) were Rs 10,38,037 crore.