BJP looks at a tax-free regime

Discussion in 'Politics & Society' started by parijataka, Sep 19, 2013.

  1. parijataka

    parijataka Senior Member Senior Member

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    Interesting and revolutionary, first though they have to win in 2014 !

    BJP looks at a tax-free regime

    New Delhi: In a so-called “bid to transform the current Indian socio-economic scenario” and “provide relief to the middle class while boosting the industrial sector”, the BJP is looking at a “revolutionary” five-point proposal to abolish all direct and indirect taxes (except customs duty to protect domestic markets), including sales tax, income-tax, excise duties, service tax, VAT and corporate tax, among others.

    A think-tank, Arthakranti, had a series of meetings with the top BJP leadership, including L.K. Advani and Narendra Modi, to discuss the proposal. Even RSS chief Mohan Bhagwat has been briefed about the proposal. Instead of direct and indirect taxes, the think-tank has proposed to impose a tax of “say two per cent” on every banking transaction.

    While the BJP leadership, which is preparing its “visi-on document”, is debating the proposal, the national spokesman of the think-tank, Deepak Karanjikar, claimed that “it will generate a revenue of `15 lakh crore” for the government. The proposal, incidentally, will take at least three years for implementation if accepted by the ruling party at the Centre. A draft parliamentary bill has also been prepared for the “new taxation system” by the think-tank. Some in the BJP are, however, sceptical about the proposal.

    New tax proposal aims to reduce graft

    As per the thinktank Arthakranti’s proposal to BJP leaders, the transaction tax on credit accounts will be shared by the Centre, states, local authorities and the transacting bank. High denomination currency above Rs 50 is proposed to be abolished. “Some 58 per cent of the population pays Rs 20 a day so they will not be affected by this,” said Mr Karanjikar.

    Under the proposal, currency transactions will not attract any transaction tax. But, it is proposed, cash transactions above a level, say Rs 2,000, will be deemed illegal.

    “If you buy anything, like a camera, above this limit in cash and if there is some problem with the product, you will not be able to enforce the warranty on it as the transaction will be considered illegal,” said Karanjikar.

    The thinktank said that its proposal will bring more transparency and tackle the issue of black money.
     
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  3. Bangalorean

    Bangalorean Stars and Ambassadors Stars and Ambassadors

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    Subramainam Swamy keeps saying in his speeches, that income tax should be abolished. His point is: rich people don't pay taxes - all the lawyers and doctors and rich businessmen - they pay a negligible amount of tax, and most of the money is black. And the poor don't pay income tax, obviously. His proposal is to abolish income tax altogether, and his assessment is that the revenue loss will be more than compensated by increase in indirect taxes due to increased spending and increased saving.

    Sounds revolutionary, but I am no economist. I am not sure how this will impact the nation's finances and economy. But then, Swamy is an economist from Harvard, and he must be right. :noidea:
     
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  4. trackwhack

    trackwhack Tihar Jail Banned

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    Taxation based on consumption alone. Why should someone who saves for a rainy day be taxed? Tax only based on consumption. Very interesting way of implementation.
     
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  5. kseeker

    kseeker Retired

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    +1, I agree !!!

    On a personal note, I don't want to pay any F**king tax anymore :sarc:
     
  6. sob

    sob Moderator Moderator

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    Definitely worth a look into this.

    somebody more knowledgeable should comment and bring more clarity here.
     
  7. Decklander

    Decklander New Member

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    I am all for it. We shud have no taxes at all for anyone as rich don't pay any and so do poor, its only the middle class which ends up being treated like a tax mule. Abolishing currency above 100 will remove black market transactions and also bribes as it will too difficult for anyone to carry and store so many notes in his office or home. It will also kill the ISI game of pushing fake currency in India and stop hawala transactions which will help us fight terror more effectively. Ensuring that all transactions above Rs 2000/- to be done thru banking channel will ensure that large amount of unaccounted transactions will come to the fore. This will also remove the need for giving tax breaks or other such schemes. The revenue of the govt will continue to grow as the economy grows.
     
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  8. Ray

    Ray The Chairman Defence Professionals Moderator

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    Would this not encourage a huge 'grey' market?

    What about the convoluted hawala transactions where in black money is funnelled out and brought in as 'foreign' investment to make it white?

    I am no tax guru or have any idea of finance and economy.

    Just stray thoughts.
     
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  9. parijataka

    parijataka Senior Member Senior Member

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    Agree with poster above who says rich dont pay taxes honestly while poor are out of the tax net, at least income tax.

    Taxing consumption rather than income makes sense too.

    Plus consider that the income tax paying %ge of citizens is something abysmal at 2.77# of the population this will relieve the middle class tax payer of the burden he carries on his head.

    Waiting for some expert to come around and discuss.
    @Sakal Gharelu Ustad, @pmaitra, @Yusuf, @Singh pl shed some gyan.
     
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  10. pmaitra

    pmaitra Moderator Moderator

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    Spoken like a true Texan. In Texas, you have no income tax, but you pay high sales tax. I like that idea.

    I will comment in detail, later.
     
  11. Singh

    Singh Phat Cat Administrator

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    Not an economist but this has been discussed:

    , Taxes should be on Consumption and not on Income, hence GST and DTC. This will bring every Indian under Tax net.




    Sent from my iPhone using Tapatalk 2
     
    Last edited by a moderator: May 10, 2015
  12. parijataka

    parijataka Senior Member Senior Member

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    waiting to hear from you !
     
  13. pmaitra

    pmaitra Moderator Moderator

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    No, it won't. Most of the currency-units do not exist as pieces of paper. They exist on servers.
     
  14. anoop_mig25

    anoop_mig25 Senior Member Senior Member

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    what if people stop using banking transaction and prefer currency transactions .
     
  15. Decklander

    Decklander New Member

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    This will remove the money from election process as any huge widrawal will come to notice of tax authorities. Small currency notes will make it nearly impossible to horde money or do hawala transactions as all hawala transactions are done in black money in cash. The banks can be allowed to keep a percentage of this money as their fees like we do in case of UDF for airports wherein the airlines are allowed to keep 5% of amount as collection fee. This will ensure that banks will not need to charge interest to generate income which will result in extremely cheap loans resulting in a huge boost to economy. banks give you interest on your deposits and they lend at a higher rate to generate income so while you get just about 9% interest on deposits, you have to pay an interest of nearly 12% on loans. This problem will get resolved thru the system I proposed. This is a great idea as everyone will have to pay for consumption and the rich will get taxed more while poor will have no effect as they are in any case paying sales tax etc on things they buy. Also we will than be able to remove all subsidies from every sector except health, education and food. The removal of subsidy will lesson the burden on economy and need for taxes to generate money for subsidy will not be there.
     
  16. Decklander

    Decklander New Member

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    This part has already been answered. Any transaction above 2000 to be thru banks only and small denomination of currency will make it difficult. Also we now have aadhar system and direct bank transfer of subsidy, this means every house hold will have a bank account and so there will be no problem in putting this system in place.
     
  17. Eesh

    Eesh Regular Member

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    On a personal note I don't want to pay any tax anymore
    too is forceful.
     
  18. Decklander

    Decklander New Member

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    have you ever paid bribe thru cheque? Bribes in form of gifts are paid but small time bribes which constitute majority of bribes paid to govt employees are paid thru hawala and cash channels. Even the money paid to political parties is paid thru cash. All this will stop.
    We must also ban all kinds of forward trading in India to stabilise prices and help rupee regain its true value. this will bring down prices of food item immidiatly. Anyone making huge withdrawals shud be asked to file the return on the usage of that cash to ensure that it is not converted to black.
    You may argue as to how will we ensure transparancy when it comes to retail trade where most transactions are done thru cash. Well the answer is simple, the guy who sells buys it from some place and since he buys in bulk, let him pay the transaction cost which he charged from the people.
     
  19. SLASH

    SLASH Senior Member Senior Member

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    All political parties cannot even get GST implented. How in the world can they implement this? GST makes a single tax window and will abolish excise, sales and value added tax. The GST rate would be any where between 15-20%.
     
  20. pmaitra

    pmaitra Moderator Moderator

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    Not disagreeing with what you wrote above. I am disagreeing with what you said below:
    In other words, abolition of >= Rs. 100 notes will not remove black market transactions. I will come back to this thread later and write in more detail.
     
  21. Ray

    Ray The Chairman Defence Professionals Moderator

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    I take it bribes will be strictly a cash transaction.
     

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