The proposal of a Banking Transaction Tax in lieu of all Central and State levies, except customs duty, has ‘in-principle’ support of the Bharatiya Janata Party, said yoga guru Baba Ramdev.
His statement comes a day after reports surfaced that the BJP did not agree to this proposal. Speaking to media persons here on Thursday, Ramdev said that this would be made a big issue in the forthcoming general elections.
He also said that his tax proposal prescribes BTT to be levied based on slabs, so that the tax burden could be higher on the rich and minimal on the poor. At the same time, workers and farmers will not be taxed.
Ramdev also claimed that the structure proposed by him was progressive, as the rich and the corporates engaged in manufacture of luxury goods, liquor and tobacco, would have to pay higher taxes. In the new scheme of things, a banking transaction tax would be levied on receiving transaction at different slabs, on manufacturers of goods, service providers and traders,
“The rates of BTT could range from 0.1 to 30 per cent for various slabs. Tax will be levied on money received in bank account. Based on daily banking transaction, the Government could get up to Rs 30 lakh crore annually,” Ramdev told reporters.
The Finance Ministry has estimated Rs 12 lakh crore through various central taxes in the current fiscal while the State levies will fetch Rs 8-10 lakh crore to all the State Governments together.
Two categories Currently, the Central levies are divided into two categories, direct and indirect taxes. Direct Taxes include Personal Income tax, Corporate Tax, Securities Transaction Tax and Wealth tax while indirect taxes mean Custom Duty, Central Excise Duty and Service Tax. All these taxes are levied with education cess. On the other hand State Governments levy Value Added Tax/Sales Tax, Local Excise Duty (on alcohol), and Professional Tax. Local bodies mainly impose some kind of entertainment tax and octroi (in selected states only) besides others.
Ramdev has also proposed demonetisation of currency notes in the denomination of Rs 500 and Rs 1,000 crore. There should also be a voluntary scheme for disclosing gold and currency held in cash. “All these will help in curbing black money while at the same time money coming out in system will help in accelerating investment and job creation,” he said.
As regards the distribution of proceeds, he said, the centre and states could be given 40 per cent each of the total proceeds, local bodies 18 per cent and banks 2 per cent. The money provided to the banks could be used for expanding the banking network in the country, he said, adding, such a step would help in promoting financial inclusion.