Part I of the rejoinder to Indian Express Article http://epaper.indianexpress.com/c/2220176 was posted here http://taxanalyser.blogspot.in/2014/01/rejoinder-to-if-every-bank-transaction.html
Objection 4:It would be highly regressive subsidising the rich at the expense of the poor
Wonderful argument!!!! What about Income-Tax !!The very epitome of social justice!!! And other taxes like sales tax !!! Very surprising that a very evasion-prone tax like Income-Tax is model of social justice!!!! Very surprising that double digits sales tax paid by poor is model of social justice!!!! Present evasion-prone taxes can never be model of social justice. That tax is regressive which is evasion-prone and cant be collected. That tax is fair and just which can be collected. TAX TO RAISE REVENUES. SOCIAL JUSTICE CAN BE TAKEN CARE OF ON THE EXPENDITURE SIDE OF BUDGET
Object 5:Schemes like Direct Cash transfer will be first casualty
Pay outs can be given to such accounts periodically to offset partially or wholly the tax collected from such accounts. Tax exemptions create a mess.
Objection 6:Only advantage tax experts see is the speedy and transparent collection of taxes
This is the biggest advantage that any tax needs!!!!! Present taxes being evasion-prone and litigation-prone and hassling lack (i) collection (ii)speed (iii)transparency !!!!!
Objection 7:BTT envisages ban on any cash transaction above Rs.2000....it would require an army of inspectors
Not at all. It is not a ban. It is just that party paying in cash cant enforce contract/assert his rights in courts by filing cases/complaints! In fact , Kerala HC has suggested a ban on large cash dealings to curb black money!!! May be Rs.2,000 is too small a limit. Give inspection the limit needs to be at least Rs.20000. Even today I buy jewellery and I dont take pucca bill to save sales tax...I do so at my risk. If I am robbed of that jewellery, I will not be able to register FIR with police!!! FAIR ENOUGH!
Objection 8: A person cannot be prosecuted in the new dispensation for keeping large bundles of cash
Where is the law of the new dispensation which says this? Even under current dispensation, where is such a provision? But this is a useful suggestion...perhaps the only thing in the whole article which makes sense! In an Indian Express article full of drivel, this does make sense. Such provisions for prosecution should be there. Onus should be on everyone to justify that cash balance above particular limit is from tax paid bank withdrawals.
Objection 9:BTT will be undoing what has been done for financial inclusion
Not at all. Au contraire, more money will be there in banking system. See responses to Objection 3 and Objection 5 above
Objection 10:Penetration of banks in India is very low
This is not irremediable. RBI plans to overcome this deficit by 2016. May be BTT can be introduced in 2017
Objection11:This move will lead to taxation of agricultural income
So be it. No reason why rich argiculturists shouldnt be taxed. Help to sector can flow from expenditure side from higher revenue.
Objection 12:Existing taxes being reformed
Thats reforming the obsolete
Except one important point, none of the objections raised in the article has any serious merit. But path will not be a rosy path ahead. Next blogpost detailing hurdles in the way.
Objection 4:It would be highly regressive subsidising the rich at the expense of the poor
Wonderful argument!!!! What about Income-Tax !!The very epitome of social justice!!! And other taxes like sales tax !!! Very surprising that a very evasion-prone tax like Income-Tax is model of social justice!!!! Very surprising that double digits sales tax paid by poor is model of social justice!!!! Present evasion-prone taxes can never be model of social justice. That tax is regressive which is evasion-prone and cant be collected. That tax is fair and just which can be collected. TAX TO RAISE REVENUES. SOCIAL JUSTICE CAN BE TAKEN CARE OF ON THE EXPENDITURE SIDE OF BUDGET
Object 5:Schemes like Direct Cash transfer will be first casualty
Pay outs can be given to such accounts periodically to offset partially or wholly the tax collected from such accounts. Tax exemptions create a mess.
Objection 6:Only advantage tax experts see is the speedy and transparent collection of taxes
This is the biggest advantage that any tax needs!!!!! Present taxes being evasion-prone and litigation-prone and hassling lack (i) collection (ii)speed (iii)transparency !!!!!
Objection 7:BTT envisages ban on any cash transaction above Rs.2000....it would require an army of inspectors
Not at all. It is not a ban. It is just that party paying in cash cant enforce contract/assert his rights in courts by filing cases/complaints! In fact , Kerala HC has suggested a ban on large cash dealings to curb black money!!! May be Rs.2,000 is too small a limit. Give inspection the limit needs to be at least Rs.20000. Even today I buy jewellery and I dont take pucca bill to save sales tax...I do so at my risk. If I am robbed of that jewellery, I will not be able to register FIR with police!!! FAIR ENOUGH!
Objection 8: A person cannot be prosecuted in the new dispensation for keeping large bundles of cash
Where is the law of the new dispensation which says this? Even under current dispensation, where is such a provision? But this is a useful suggestion...perhaps the only thing in the whole article which makes sense! In an Indian Express article full of drivel, this does make sense. Such provisions for prosecution should be there. Onus should be on everyone to justify that cash balance above particular limit is from tax paid bank withdrawals.
Objection 9:BTT will be undoing what has been done for financial inclusion
Not at all. Au contraire, more money will be there in banking system. See responses to Objection 3 and Objection 5 above
Objection 10:Penetration of banks in India is very low
This is not irremediable. RBI plans to overcome this deficit by 2016. May be BTT can be introduced in 2017
Objection11:This move will lead to taxation of agricultural income
So be it. No reason why rich argiculturists shouldnt be taxed. Help to sector can flow from expenditure side from higher revenue.
Objection 12:Existing taxes being reformed
Thats reforming the obsolete
Except one important point, none of the objections raised in the article has any serious merit. But path will not be a rosy path ahead. Next blogpost detailing hurdles in the way.
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