We will Look at the Idea of Cash Transaction Tax: Revenue Secy Hasmukh Adhia Deepshikha Sikarwar
The tax department won’t harass genuine taxpayers, revenue secretary told and in an interview. He also spoke about the implementation of the goods and services tax. Edited excerpts:
day, many traders deposit their everyday sale into the bank. If cash withdrawal tax is imposed, they will say why should I deposit if I have to pay tax when I withdraw it. We have to see. That of course is the logical thing to do. Idea is to limit the flow of cash in the economy as much as we can but what should that number be, when should we stop is for the department of economic affairs and RBI to take a view. How do we budget for it? Can we put a figure to something which is not certain? Suppose we put Rs 50,000 crore in revised estimates and give this money to agriculture, health or education and if money does not come, how do we tackle it? This is a dilemma. Whatever comes we will use it next year. You know the Indian mentality--most of the response comes in the last moment. That is what happened in the case of foreign black money, in the case of IDS scheme. So in PMGKY also it may come at the last moment. So it’s anyone’s guess. We are sincere about our attempt to get as much tax as possible without harassing people. (The scheme ends on March 31.)
A vast majority of professionals do not pay tax. How can they be brought into the tax net? We will have to do something. People have to come forward and complain. People have to come forward and exercise their right. If an honest taxpayer is made to pay cash, then he must insist on paying by digital means or cheques. Now there is a fair amount of awareness. What a shocking figure--76 lakh people showing income of over Rs 5 lakh or more, out of which 56 lakh are salaried.
The corporate tax cut to 25% covered most companies in terms of numbers but the bigger ones are out. Are you firm on the 2019 timeline for reducing their rate as well? Depends on how much resources we have to give away with this concession. The cost is too high. If we have to reduce it by 1% for all the companies, the cost will be Rs 18,000-19,000 crore. Effective tax is much less. Ninety-six percent of companies have benefited from what we have done. All MSMEs (micro small and medium enterprises) are covered by this, so their competitiveness vis-à-vis large companies also goes up.
Should our income taxes go up through broadening of the tax base, do you think the surcharge on high incomes could be rolled back? We don’t want to burden the same people who are paying honest tax. Our attempt will be to broadbase the tax base and then to reduce the tax burden overall where possible. There is a big personal income tax surge budgeted for next year. Are we expecting a broadening of the tax base or more honest income declaration? Both. People who are paying tax will also start showing more income. They know the government is serious about it. The government is not going to stop in its drive to get black money out, so people have become very serious about it. Let’s show some amount if not full amount.