BJP leader Nitin Gadkari has said the partys vision document,to be unveiled ahead of the general elections in 2014,may include a proposal to abolish levy of income tax,sales tax and excise duty.
The former party president who is in-charge of preparing the partys vision document India Vision 2025,said the idea was being debated within the party. We were talking about tax and although we have not decided as yet but a good presentation came before us. There is a suggestion of complete abolition of income,sales and excise tax, he said,addressing a function organised by PHD chambers on economic agenda of political parties.
The comments come in wake of the UPA-II trying to push direct tax reforms by introducing a revamped income-tax legislation the direct taxes code (DTC) which is pending in Parliament. The comments show that DTC may undergo a complete overhaul if a BJP government comes to power. Gadkaris comments also drew sharp reactions from tax experts,who termed the idea unviable and regressive in nature.
Sudhir Kapadia,partner,E&Y,said,Any major country across the world has not been able to do away with income-tax. The UAE is the only country that does not have income tax. As a part of revenue raising exercise,the idea does not fit into the economics of it. Though it is a laudable thought,the government will not be able to make good of the loss despite having a pure goods and services tax like New Zealand.
Gadkari however,claimed that the total revenue of the country now is Rs 14 lakh crore and if we abolish these taxes and apply around 1 or 1.5 per cent of expenditure or transaction tax,then we will get around double the revenue.
Gadkari said he has already interacted with around 450 people and the document is expected to be out in a months time. Another proposal being deliberated by the party is the doing away of Rs 500 and Rs 1,000 notes for ushering in transparency,he added.
Agreeing to the view,senior BJP leader Subramanian Swamy,present during the occasion,said if one had auctioned the natural resources properly,one did not have to have income tax at all.
He said if the government had auctioned 2G spectrum,at least Rs 1.76 lakh crore extra amount,which went into private hands,would have come to the government. If the coal blocks and oil blocks would have been auctioned by the government,it would have fetched Rs 11 lakh crore and Rs 24 lakh crore respectively,he added.
Illegal money lying in foreign banks mostly stashed by politicians is Rs 120 lakh crore. And what is the total income tax bill…just Rs 2.5 lakh crore. Why should we pay income tax? I urge Nitin Gadkari that we should abolish income tax, he said.