Bharatiya Janata Party studying radical proposal for abolition of all direct, indirect taxes imposed on individuals

Jan 07 2014, 21:17 IST
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Proposal submitted to Bharatiya Janata Party's Vision 2025 committee, headed by former party president Nitin Gadkari. (PTI) Proposal submitted to Bharatiya Janata Party's Vision 2025 committee, headed by former party president Nitin Gadkari. (PTI)
SummaryBharatiya Janata Party expected to take final decision on tax stance before general elections.

In a radical proposal, a hitherto unknown research group has suggested abolition of all direct and indirect taxes for individuals as well as corporates in favour of a nominal transaction tax only for receipts, which is being studied by main opposition party Bharatiya Janata Party.

While some Bharatiya Janata Party leaders have already talked about such a proposal, its main proponent, Pune-based Arthkranti Pratisthan, today claimed that this system would actually help grow India's tax revenues nearly three times from about Rs 14 lakh crore currently to over Rs 40 lakh crore.

Read more: Congress mocks Narendra Modi over promise to reform taxation system

A senior Bharatiya Janata Party leader, however, said that it was one of the many proposals currently on table for preparation of the party's Vision-2025 document, and a final decision would be taken only after taking into accounts suggestions from various quarters on Arthkranti's proposals.

The party expects to take a final decision before the general elections, he said. First, the party's vision committee would take a call on this and the same would be thereafter sent to BJP's Parliamentary Committee for final decision, the leader said, while adding that the proposals are being studied currently.

The proposal has been submitted to BJP's Vision 2025 committee, which is headed by former party president Nitin Gadkari. This committee is working on reforms in five broad categories -- judiciary, education, police, administration and tax.

While making presentation before journalists on their proposals, representatives of Arthkranti claimed here that they have also made presentations before others including Arvind Kejriwal of Aam Aadmi Party, while they are also approaching IAS officers and industrialists.

They also said that Arthkranti has been in touch for about five years with Baba Ramdev, who also recently talked about such radical taxation proposals.

While admitting their proposals appear "radical" in nature, Arthkranti representatives said they are suggesting a corrective programme not just in taxation area, but for the entire economy.

However, they could not explain the feasibility of implementing such a taxation system, especially in areas like states losing their fiscal powers and the cascading effect of a receipt-based transaction tax in manufacturing and other business sectors.

When asked whether a receipt tax at every level -- starting from raw materials to sale of a product -- could lead to much increased prices because of all tax payments eventually being passed on to

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