The organisation behind former BJP president and chairman of the partys vision document committee for Lok Sabha elections Nitin Gadkaris suggestion of abolishing a plethora of taxes within the country on Thursday made a presentation before the BJP top brass.
A team of Pune-based Arthakranti made a presentation to BJP president Rajnath Singh,party patriarch L K Advani,Leader of Opposition in the Lok Sabha Sushma Swaraj,Leader of Opposition in the Rajya Sabha Arun Jaitley,former finance minister Yashwant Sinha and former party president Nitin Gadkari,briefing about their concept of simplifying taxation by a universal,flat banking transaction tax.
Gadkari had indicated that the party was considering their proposal of abolishing direct and indirect taxes in the country that will be replaced with a flat banking transaction tax. Yashwant Sinha had criticised the proposal. A section of BJP leaders is sceptical of proposals that envisage abolishing currency notes of higher denominations (Rs 500 and Rs 1000) and seeks to encourage plastic money in the form of credit and debit cards,wherein each transaction will be taxed.
The budget documents suggest that central government and state governments revenue collection from taxes are in the range of Rs 11-12.5 lakh crore annually… A hypothetical two per cent tax on banking transaction would mean about five thousand crores of revenue on a daily basis. For 300 days of banking,it will amount to about Rs 15 lakh crore of annual revenue from current banking transactions. This is more than the loss the government would incur by abolishing direct and indirect taxes. Statistics suggest that banking transactions are merely a fraction of total financial transaction in the country with about 80 per cent being in cash. If we account majority of these cash transactions into banking,this will amount to about Rs 40 lakh crore of annual revenue from this tax, Mukesh Sharma,associated with Delhi chapter of Arthakranti,briefed about the broad contours of their suggestions.
Sources present in the meeting said many top BJP leaders were not quite enthusiastic about their proposals as they found loose ends that will make it difficult for the plan to be put to action,given the realities of banking in the country. Yashwant Sinha was learnt to have voiced his reservations about the proposal in the meeting itself.