The Bharatiya Janata Party (BJP) is talking about the abolition of income, sales and excise tax. Former BJP president Nitin Gadkari, who is in charge of preparing the party's vision document, 'India Vision 2025', said that the party is deliberating the matter and may include it in its vision document to be unveiled ahead of general elections next year.
Gadkari said he was contemplating to include a proposal to abolish income, sales and excise taxes in the vision document of his party. “A Pune-based institute has done a study and has recommended abolishing these taxes. I am thinking about this proposal,” he said. Gadkari is heading the team that is preparing the vision document for the general election. Gadkari was addressing an interactive session with industrialists, organised by the PHD Chambers of Commerce and Industry (PHDCCI). He was accompanied by former commerce minister Subramanian Swamy. Swamy is the convenor of the vision document committee.
According to reports, Swamy had in the past suggested abolishing income tax. But then, he had qualified this as his personal view.
Swamy had argued that abolishing income tax would boost savings. Gadkari said instead of these three taxes, it was better to have expenditure and transaction taxes.
Mr Gadkari said that the total revenue of the country is Rs. 14 lakh crore and 1.5 lakh bank branches are operating in the country presently.
"If we abolish these taxes and if we apply around 1 or 1.5 per cent of expenditure or transaction tax, then we will get revenue to the tune of around Rs. 40,000 lakh crore. So those 3.5 lakh people who are using beacons of various colours now, they will not be required anymore as no tribunals or commissioners will be required," he said.
"So I think along with transparency, there should be time-bound result-oriented administration coupled with right way of economic reforms and if it so happens, then the 1.5 lakh banks operating now will become 10 lakhs. There is another suggestion of doing away with Rs. 500 and Rs. 1000 notes...we are deliberating on these proposals as we want transparency..." Gadkari said.
Echoing Mr Gadkari's thoughts, senior BJP leader Subramanian Swamy said that there was no shortage of resources in the country and "if one had auctioned the natural resources properly, one did not have to have income tax at all".
Giving details, he said if the government had auctioned 2G spectrum, it would have got at least Rs. 1.76 lakh crore as extra which went to private hands.
He maintained if the government had auctioned the coal blocks, it would have got Rs. 11 lakh crore and by auctioning the oil sites, Rs. 24 lakh crore could have been realised.
"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," Mr Swamy said.
"Do you think if you abolish income tax, the middle class will squander their money? No they will put it in banks and will be available for investment. It is the same with corporate income tax...You can abolish it."