Dear Anjana,
A few days back , I read your following article in Economic Times , where you write :
=================================================================================================
Jaitley ought to scrap dysfunctional
taxes, such as the personal income tax, and focus on taxing expenditure more
effectively. The twin move will likely give the economy the consumption boost
it needs.
The result is that in a country with a
population of more than a billion, barely 2% pay income tax. And that’s mostly
those who draw a fixed salary that is tax-deducted at source.
It’s easy to see why millions of Indians
do not want to pay any income tax. For a start, transactions are mostly cash in
an unstructured environment, making evasion hassle-free. How does the
government track income for the local plumber fixing a leaky pipe, or the local
vegetable vendor selling to households? It’s nearly impossible.
Overall, there is little by way of example
to incentivise tax evaders into becoming taxpayers.
Scrapping personal income taxes, on the
other hand, will end both covert and thrifty spending. It will free up incomes
that could find their way to services ranging from travel to home improvement.
It will also give a fillip to consumables from groceries to gadgets. The
knock-on effect will create a demand for goods and services that will bolster
economic activity. Ring-fenced with tighter GST monitoring, the government
might have a winning formula.
I have echoed your views in my following
blog , which you may want to look up
You may also want to take a look at :
Budget Time is Taxing
Time ?
With Regards,
hemen
parekh / Mumbai
(
M ) +91 - 98,67,55,08,08
Monday, 8 January
2018
Tax Sops ? How about Abolishing ?
Times
of India ( 08 Jan ) carries following news report :
“
Eye on ’19 polls, govt may woo the middle class with tax sops “
Extract
:
· Middle
class taxpayers are a key BJP constituency
· Finance
Minister Arun Jaitley has said previously that government believes in leaving more funds for people to spend and invest
Dear Shri Jaitleyji :
As
the above news suggests , you are facing pulls from several sides
And
, to satisfy everyone ( - although a little bit ) , you will be tempted to
resort to tinkering / tweaking the personal income tax , a little bit , here and there
But
, even though it may not be possible to announce total abolition of personal
income tax with effect from April 2018 ,
you may , at least want to ask your Cabinet Colleagues :
“
What would tax payers do with the tax amount saved , in case Personal Income
Tax was totally abolished , with effect from April
2019 ? “
It
is very likely that you may get to hear something like what I wrote to you
earlier , as below :
· What would they do ?
Considering
that you make such an advance “ Declaration
of Intent “ for 2019-20 , in your Budget Speech on 01 Feb 2018 ,
it cannot be considered as “ Influencing the Voters “ , by the Election
Commission ( - breaking Model Code of
Conduct ) !
And
any opposition party that “ dares “ to criticize / oppose your “ Declaration “ , is bound to get branded
“ Anti Poor“ and lose all the 8 State Elections coming up in
2018 !
Worth
a gamble ? In the interest of not only the tax payers but entire economy ?
====================================================
08
Jan 2018
www.hemenparekh.in /
blogs
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