Days after BJP’s prime ministerial candidate Narendra Modi talked about tax reforms, a Nagpur-based institution, Artha Kranti, has advocated abolishing all taxes except customs/import duty and bringing a single bank transaction tax. A senior BJP leader said this proposal would be considered for inclusion in the party’s Vision Document.
“Instead of various taxes, every transaction routed through a bank will attract a certain deduction in appropriate percentage (say, 2 per cent) as bank transaction tax,” Atul Deshmukh said in a presentation before the media. He also advised withdrawals of high denomination currency, including Rs 1,000, Rs 500 and Rs 100. These two steps together would bring higher revenue, he added.
“The deducted amount will be distributed in a fixed proportion among the Centre, the State Government and local authorities. At the same time, a certain percentage could also be given to banks,” Deshmukh said. If the rate is 2 per cent, the proportions would be 0.7 per cent, 0.6 per cent, 0.35 per cent and 0.35 per cent for Centre, the state government, the local authorities and banks, respectively.
The share of banks can help them reduce the rate of interest on loans and will also help them bear tax on loan repayments. Deshmukh advised that the Government should make legal provisions to restrict cash transactions up to a limit, say, Rs 2,000.
The Nagpur-based institution made a presentation before yoga guru Baba Ramdev and others. Last week, Ramdev had pitched for abolition of all taxes and introduction of banking transaction tax. A day after this, and in an event organised by Ramdev, Modi promised to reform the taxation system in the country, saying it had become a burden on the common man.
BJP vision document Former BJP President Nitin Gadkari had last month said he was contemplating incorporating a proposal to abolish income, sales and excise taxes in the party’s Vision Document.
shishir.s@thehindu.co.in