Thursday, December 26

Abolish Income Tax, Excise & Sales Tax, compensate it by Transaction Tax - BJP

Former Bharatiya Janta Party President Nitin Gadkari on Wednesday said his party, if it comes to power, will consider a proposal of abolishing a host of taxes including Income tax, Sales tax, Excise in order to eliminate black money and “Inspector Raj” in the country.

“We have received a proposal (under India Vision policy 2025) in which Income tax, Sales tax, Excise and octroi should be eliminated. A transaction tax should be levied (instead),” Gadkari said while addressing a gathering of traders here today.

Citing an example, he said if somebody buys a car and visits a restaurant, then two per cent tax will be imposed on such transactions.

“If these transactions are carried out through banks, then our total revenue should go up to Rs 40 lakh crore as against current revenue of Rs 14 lakh crore,” he said, adding, it would also curb the practice of black money and provide relief to traders from “Inspector Raj”.


"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 becons of various colours now, they will not be required anymore as no tribunals or commissioners will be required," he said.

However, he said, “This proposal is under consideration and no decision is taken yet. But when BJP comes to power then we will consider it. We also want a debate on this issue.” Gadkari, who is incharge of party’s India Vision document, said the party is in the process of preparing India Vision Document 2025 incorporating all issues relating to trade, industry, agriculture, transport, power etc.

“We have received about 10,000 suggestions so far on different issues from public on India Vision document,” he said.

He further said the party has received another proposal in which 3.29 crore tax payers could be exempted from filling income tax returns.

About fake currency issue, he said there is a proposal to grow special fibre made of plastic or jute at over 1,000-1,500 acres of land which would be used in making currency thus help in dealing with the fake currency in the country.

Gadkari also accused the Congress-led UPA government of its wrong economic policies, vision less leadership and poor governance. “The country is facing big problems like corruption, unemployment and inflation and the Congress-led UPA has failed miserably on addressing these issues,” he said.

Comparing the performance of the Atal Bihari Vajpayee-led NDA government with the current UPA government at the Centre, Gadkari said the country’s GDP, which was 8.5% during the NDA rule, has come down to 4.5% under the prime ministership of Manmohan Singh.

Biggest scams like coal scam, 2G scam and Commonwealth Games scam were unearthed during the UPA rule, he alleged.

He also compared key factors of growth in the BJP-ruled states with the UPA government at the Centre.

The farm growth in Madhya Pardesh and Gujarat remained at 18.90% and 11.50% respectively which was much higher than the country’s agriculture growth of 8.5%.

The former BJP president also took dig at Congress for weakening the rupee, spiralling inflation and rising import of coal, petroleum products and fiscal imbalance.


1. DNA
2. PTI
3. Economic Times

However, Study suggests that, the transactions has to be between 4.5 - 5 %, then only it can compensate the tax revenue. Secondly, what will be the impact of it on retail prices and also it will have bad impact on poor and middle class, as they have to pay more. Yashvant Sinha, BJP leader, personally not in favour of bringing such tax scheme.

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