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Updated: September 29, 2011 02:11 IST

Rich must be prepared to pay more tax: Chidambaram

Special Correspondent
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Mr. Chidambaram, as a Finance Minister, had slashed taxes and was credited with presenting a ‘dream budget’ in the initial years of his tenure in the Finance Ministry. File Photo: R.V. Moorthy
The Hindu
Mr. Chidambaram, as a Finance Minister, had slashed taxes and was credited with presenting a ‘dream budget’ in the initial years of his tenure in the Finance Ministry. File Photo: R.V. Moorthy

Taking his cue from Europe, where the rich have offered to be taxed more to rescue economies out of the ongoing crisis, Home Minister P. Chidambaram on Wednesday made out a case for higher taxes for the wealthy, even while admitting that “many people” would not like his idea.

“We must raise the tax revenue to defend [the expected aggregate decline of resources]. I know many people won't like this. But, I think, I can summon up the courage to make the statement,” he said in his address on ‘Inclusive growth: A challenging opportunity' organised by the All India Management Association (AIMA) here

Interestingly, it was during Mr. Chidambaram's tenure as Finance Minister from May 2004 to November 2008 that income tax rates were slashed, and he was, in fact, lauded by India Inc. for presenting a ‘dream budget'.

“I [was] the Finance Minister who slashed your tax rates. Therefore ... you must be prepared to pay higher tax rates, especially the rich must be prepared to pay higher tax.”

In Europe, Mr. Chidambaram said, the rich were getting together to say “please tax us more.” However, “certainly this is not the place, nor I am the person to say what tax should be raised. But we should seriously consider how to raise the tax revenue of the country”.

Arguing his case for higher tax on the rich, he said the theme of faster and more inclusive high growth was to be carried forward during the 12th Plan beginning April 2012, and in its pursuit, a number of programmes, including 13 major schemes, were rolled out by the government with a budget of Rs.1,88,573 crore. “However, a question about the desired outcome of these promising schemes needs to be addressed in light of poor design, measure of quality and accountability.”

The “inclusive” growth must be reflected in the day-to-day lives of ordinary people, and the key parameters to be considered should not be GDP (gross domestic product) or per capita income, as these might consider a sectoral or State perspective. Growth ought to be reflected in access to education and healthcare facilities, good infrastructure and in reduced infant and maternal mortality rates.

“For ensuring inclusive growth, we need sustained availability of resources. Non-debt revenue should be increased; therefore, the rich must be prepared to pay more tax. Consequently, the government shall be liable and accountable to the taxpayers on the way the money is being spent,” Mr. Chidambaram said.

On the occasion of the AIMA's 38th national management convention, the Minister conferred ‘Managing India' awards for emerging business leaders for the year on GVK Industries vice-chairman G.V. Sanjay Reddy and Bajaj Auto managing director Rajiv Bajaj for their contribution to emerging India. He conferred ‘The Honorary Fellowship' award on Yes Bank CEO and managing director Rana Kapoor in recognition of his contribution to inclusive growth.

Who says this...RICH Must pay more TAX?!There was an article on Saturday, September 3, 2011,Cabinet declares assets,P Chidambaram's assets as declared for 2009 elections:Movable assets: 14,36,85,677 Immovable assets: 13,02,22,865,TOTAL 27,39,08,542.PC is the topmost among top 5 crorepatis of Tamilnadu 2009 election seekers. They enjoy Free Accommodation,Car,Flight,Telephone,PA's,Salary,Holiday Trips in the name of Business Trips,Tie-ups..etc..etc..from the tax paid by us. Have we ever heard the highest tax payer from Politicians?

from:  jagadeesan
Posted on: Oct 10, 2011 at 23:52 IST

There is no use of paying tax in india.First you will not get the security for yourself and for your will not get medical will not get water will not get good roads (In toll gate u have to pay separately).Tax on everything more than 70 % of your income money go as tax.If you ask about where our tax money spent you will be punished.What kind of democracy.Need lot of changes ,need honesty,truth,humanity,dicipline for indian people.This has to be implemented from school level.Otherwise india will be the worst country in the world.

from:  raghupathi
Posted on: Oct 1, 2011 at 13:18 IST

Mr. Chidambaram's views on taxing the Indian rich as in the US, UK and any other developed nation because the rich in those countries have requested their governmenrts to increase the taxes on the rich, does not come as a surprise.As in those countrie- as in India too, there is nothing that prevents the rich from voluntarily donating all their extra riches to the Government coffers or even to charity organisations. The only difference is that the effect of any taxes paid in those countries is quite visible in the quality and living standards of the taxpayers. whereas in India it has to be viewd with magnifying glass. And finally what do you find ? All your taxes have been eaten up by the politicians and the babus like pests while you have slogged all your life to earn and save a fraction of their income so that you can rest in peace .We have been taxed on goods and services by the government.Inflation has made our lives impossible. We do not want to pay any more taxes. Do not impose.

from:  narayan
Posted on: Sep 30, 2011 at 16:39 IST

Mr.Chidambaram is a home minister.He has to do his job.He has no rights to talk about the tax paying system,which is Finance Minister's job.Can Chidambaram give assurance that the congress party which is having enormous wealth is paying tax properly.What is the use of paying tax in India?He cannot compare India with other countries.All the tax paying money were looted by the so called politicians and govt officials.Still the govt is not able to provide proper roads,water, medical facilities and free education.Why the govt is giving contract to the private company's for laying highway roads.And these private companies are charging exorbitant amount in the Toll plazas for years.Can Mr.P.Chidambaram answer to this?

from:  Abu
Posted on: Sep 30, 2011 at 12:08 IST

It is not about the rich paying more taxes! Pay your taxes should be the motto! You go to the market , barber shop or hotel and buy any product or service, there is no bill (receipt) and there is no tax for the government!

from:  Vinod T G
Posted on: Sep 30, 2011 at 06:55 IST

With their new definition of poverty (spending Rs. 781 per month) in an age of rising prices, may we ask the minister who meets his definition of wealthy? Of course it will be the middle class who struggle for years to eke out a living. The rich, meanwhile, will go scot-free under the many loopholes and illegal dealings.

from:  Sundar
Posted on: Sep 30, 2011 at 06:19 IST

Chidambaram should also tax another category of non-tax payers i.e FARMERS. All politicians routinely file incomes as farmers and pay zero tax as farming income is free of tax. WHY ? Chidambaram should tax all farm income above Rs 5 lakhs per annum at the same 30% tax rate that middle class urban professionals pay. I am sure he will get a lot of money as income tax this way. Can he give us the number based on last year's income tax returns ? Also, the income he will get based on the records with all revenue officers of villages?Chidambaram should also scrap the tax treaty with Mauritius. He has resisted attempts to tax income of FII's registered in Mauritius. Most suspect and many claim to know that this is politician's ill-gotten money returning to India ; being invested for a profit and going back to tax-havens without being taxed. What will this amount be, if this income is taxed ? Chidambaram should clarify.Taxing the rich is one part of the story - the other is transparency.

from:  Saurabh Sharma
Posted on: Sep 29, 2011 at 19:35 IST

If revenue generation is the target tap the Swiss bank accounts; tax large farm incomes; put in place land reforms; take back all stolen money. Tapping existing tax payers would not yield more, when the main evaders (read politicians and bureacrats) remain under the radar.

from:  Shekhar
Posted on: Sep 29, 2011 at 16:47 IST

Sir, what is the criteria for identifying rich? Is it above Rs.40/- per day????

from:  narayan mk
Posted on: Sep 29, 2011 at 16:31 IST

There is no need for the Govt.of India to impose tax to People of India, if Only the Govt take care of the wealth of the politicial people that is more than enough, Each minister's and their family members wealth is so much which we cannot belive it at all and the BLACK MONEY Kept in Swiss bank and other banks in world wide in the name of shares is more then enough for the Poor People of India to come out of poverty Can MR.P.Chidambaram do some thing for this will expect a true Citizen Of India instead giving new ideas. This only to make make money from the wealthy people.

from:  Antony Jerome Saudi Arabia
Posted on: Sep 29, 2011 at 14:59 IST

But Mr.Chidambram this is INDIA, here rich will ask for privelege of not paying any tax because they give employment. Also the politicians will never agree to be taxed.

from:  Shaleen Mathur
Posted on: Sep 29, 2011 at 13:55 IST

Rich be taxed at higher rates and Corrupt be hanged to death. Lets be practical and see where the tax money goes. No welfare for common man but to swiss bank of the corrupt. PC please practice before preaching.

from:  sunny
Posted on: Sep 29, 2011 at 13:48 IST

The final aim of collecting taxes is to help the government serve it's citizens. Rather than collecting more taxes from the rich, I think its more sensible for the media/government etc to instill a sense of pride in the rich towards helping their country grow (through acts of philanthropy). One has to congratulate "Times of India" for its recent drive in creating a sense of pride in philanthropy. I am hoping other people/organizations in power and authority will also follow suit.

from:  Angel
Posted on: Sep 29, 2011 at 12:43 IST

Atleast now the Minister's seem to be thinking, one of the worlds richest man is paying 60 Rs for a litre of petrol and the same is charged on a person earning Rs.10,000 a month, people who own crores and crores worth of property are also paying same taxes, infact they dodge tax payment whereas a humble salaried man is so harassed with taxes on his small salary, so it perfectly alright that rich people should be not only taxed more but also charged more on all that they consume as that is the only way to control prices

from:  Xavier surender
Posted on: Sep 29, 2011 at 11:14 IST

Rampant corruption in the Government does not encourage citizens to support this statement. Even if more tax is paid , where will it end ? In Swiss bank accounts? Better that Chidambaram allow us to directly fund schools, hospitals, highways where all the payment vouchers of the projects are available online via the Internet for everyone to access and detect. These direct payments should be deductible from the income tax liability for that year. Ready , Chidambaram ?

from:  Saurabh Sharma
Posted on: Sep 29, 2011 at 10:07 IST

Our home minister and former finance minister is preaching the gospel from a state of delusion - given the poor record of the government in bringing back accumulated black money and its inability to curtail tax evasion by the rich and the wealthy, how is this suggestion going to succeed? Will the wealthy willingly let go off their spoils- does the government have any agency worth its salt to enforce this?

from:  Dwarakanath Srinivasan
Posted on: Sep 29, 2011 at 10:05 IST

There is no need to get at the rich through taxation since the revenue would go to the government and through the schemes go back to the politicians and corrupt government officials.As in Europe our rich men need not ask and wait for taxation route to part with their riches.The politicians and the rich business men should avoid all corrupt practices to stop accumulating the wealth in short times. The business heads should reduce the prices of their products now and then so that their profits are coming down and down in their annual balance sheets.The IT employees should work less and less, so they do not accumulate riches which indirectly spoil their domestic lives and values.Chidambaram is a politician and he wants to take the route of taxation instead of voluntary liquidation of wealth acquired and accumulated over the years by the rich folk.

from:  Gopala
Posted on: Sep 29, 2011 at 09:59 IST

Memories of 97% Income tax coming back? Well. Every one in the country knows why the revenue collecion is not enough. 1)First root out curruption 2) Then control the population. With out rooting out corruption, u cannot expect good tax recovery. And also if there is no corruption, the fund on public care will be used a lot better and consequently will spend less.

from:  Subramanian
Posted on: Sep 29, 2011 at 09:03 IST

Preaching by credible people is always meaningful, but i do not know about Sri Chidambaram who served as finance minster also.Why he did not consider the taxing of the dividend receipt by large shareholders at maximum rate of tax instead he drained the resources of corporate entities by taxing the dividends not in the hands of the recievers but on the corporates. Now he preaches otherwise.The policies of the ruling and that of the BJP are always pro capitalists and not the amaadmi(common man).

from:  Murthy PGK
Posted on: Sep 29, 2011 at 08:13 IST

Let Mr Chidambaram return the bribe he got from those he did favor in awarding 2G licenses. If we can cut down the corruption and the income tax cheating we do not need to raise the rates. The rate hike will only affect the honest and the dishonest and corrupt politicians will get away.

from:  kasi
Posted on: Sep 29, 2011 at 06:42 IST

Sir,taxing the very rich is a very good suggestion from this former finance minister who made dividend income free from tax during his time! As a result from that time(2004-05?), thousands of promoters of all companies,(including the PSUs), and their relatives & officers with small holdings of shares in their companies sell their shares to brokers linked to their companies immediately after declaration of dividend and get back their shares and their dividends from the same brokers, taxfree, just before or immediately thereafter,to continue as members/promoters to attend their AGMs! All such(corrupt ?) practices as at present should be taxed after certain limits of Rs.1000 or 2000/- in some form or other even if it involves double taxation!

from:  c.g.venkatesan
Posted on: Sep 29, 2011 at 06:24 IST

The countrys leadership should show honesty and sincerity before making such statements. None of the so called politicians in india have the guts to communicate the public that he is honest and sincere and also a tax paying citizen. Further none of them are interested in maintaining national integrity and taking people aalong with them. These guys are playing politics and putting the common man in trouble. These guys have not left any single area free of corruption. Happily stashing away the looted money in foreign destiny this guy is saying that rich should be taxed. We should be really happy to pay tax provided such tax earnings are propery utilised for upliftment of the country as a whole. Instead they will dole out political considerations and further amassing wealth. Mr.Chidambaram should look at his back before advisng others.

from:  Bala
Posted on: Sep 29, 2011 at 05:56 IST

Mr p chidambaram' s views on tax reforms should be given great weight by the lawmakers in India. He has rightly referred to the scenario in USA and Europe, and the country will definitely profit if the super rich in the country voluntarily agree to this proposal. In USA, Warren buffet, without any demand from any source offered to pay higher tax, and his reasons are really valid. The super rich in Europe also has come forward with such proposals in the interests of the countries there. One hopes, that in India also, there will be such moves, to help the people and the nation.

from:  C.p.Chandra das
Posted on: Sep 29, 2011 at 04:36 IST

Agreed. But this can also take lot of money to the tax heavens. Also, when I see politicians whose salary is around 5 lacs per annum is able afford anything that is below the space, paying tax seems foolish. And that at the time when his role in 2G is strongly suspected, he has no business to talk about tax and doing welfare to the needy.

from:  Babu
Posted on: Sep 29, 2011 at 03:17 IST
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