Mithran Suresh, Delhi
Raising the tax slab for super-rich and a Covid relief cess are among a raft of proposals that have been recommended in a policy paper prepared by 50 young tax officers which has been submitted to the Central Board of Direct Taxes (CBDT). Titled as FORCE (Fiscal Options and Response to Covid-19 Epidemic), the policy paper hasa string of measures to raise revenues and provide relief to the economy battered by the pandemic.
Stating that in times like these, the so called “super rich” have a higher obligation towards ensuring the larger public good, the paper has recommended that this segment of the population can be taxed through two alternative means, both of which can be imposed for a limited, fixed period of time. It has backed raising the highest slab rate to 40% for total income levels above a minimum threshold of Rs. 1 crore or re-introduction of the wealth tax for those with net wealth of Rs. 5 crores or more.
“Administratively, the former will be simpler to implement. However, the revenue gain associated with both options should be worked out to see whether the gains attached with the latter option score better in terms of a cost-benefit analysis,” the paper read. It said that the additional revenue mop-up through either of the above steps is Rs 50,000 crores, this amount should be placed in a separate kitty, almost like an escrow account.
It said that the government needs to spend considerably more to revive the economy; and it needs to raise additional revenue, but in ways that must not burden the already distressed common man.
Working from home, they have come together to leverage their combined knowledge, experiences, and commitment to building a healthy, strong and prosperous India,” Prashant Bhusan, general secretary of the Indian Revenue Service Association said in his letter to the CBDT chairman and members of the board.