At present, India has too many types of taxes such as Income tax, Corporate tax, Wealth tax, Sales tax, Service tax, Excise duty, Customs duty, Fringe benefit tax, Gift tax, Luxury tax, Octroi, stamp duty, Revenue stamp etc with rates as high as 30% for highest slabs in Income tax and 33% for Corporate tax.

Since Jago Party would reduce government activities and replace loss making public sector undertakings by private sector, its need to raise revenue by higher rates of taxation would be much less. Besides, the earnings from the capital obtained after disinvestment of PSUs, would also reduce the need to tax at high rates.

Hence, Jago Party would reduce the number of taxes and no tax rate including Income Tax would be more than 10 %. Persons having annual income up to Rs 4.0 lakh would be fully exempted from Income tax. Tax laws would be simplified by abolishing all exemptions and exceptions.

The increase in economic activities would compensate the loss of revenue & will increase job opportunities. Low tax rate would mean better compliance, more revenue and less corruption.

Q. What reforms would you bring about in taxation? How would you compensate for loss of revenue resulting from cuts in tax rates? 

Reply:

There are more than 50 types of taxes in this country. We would bring them down to less than 10. At present, our tax rate is very high: personal income tax up to 30%; corporate tax up to 33% and so on. We would reduce all tax rates to 10% or less. Up to Rs 4 lakh annual income, no income tax would be imposed.

Reduction of number of taxes, reduction in rates and simplification of taxation procedures would leave more capital with the people which would result in more investment, more employment and higher rate of growth of the economy which would bring in more revenue as number of tax payers would increase. Thus, revenue would increase, rather than decrease.