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Is BJP mulling to abolish income tax and service tax if it comes to power?
Like an intelligent politician, Ramdev Baba declared in a press conference that he will support Narendra Modi on 100% issue base support and particularly if Modi’s policy guarantees return of the black money and making it national asset. Further also he suggested that there should be no income tax and only banking transaction charges.

It may be his style of hijacking BJP’s line as ultimately he has to come back and support BJP. But the fact is also that BJP is seriously thinking to do away with income tax and service tax apart from rationalizing petro-economic. If BJP really work on it, then it would be a great relief particularly the middle class.

It would be always be unfair to pass comment unless one knows the total plan and policy. It’s learnt that, the blue print is almost ready and final touch is being given to include in BJP’s vision document.

However, general apprehensions are there. The revenue collection through income tax and service tax is to the tune of 4 lakh Crores! How this revenue can be compensated is a matter of debate. If it’s made to be compensated imposing indirect taxes, then it would be like giving sops to economically capable people and taxing poor. It can be an indirect subsidy to the people who are better placed in earnings. Personally I am always against any type of subsidy as it mean ‘Rob Peter & help Paul’!

Some estimate says that implementing bank transaction fees would compensate around 40000 Crore Rupees. Question remains how the deficit can be managed. Anyway a clear view can be taken after seeing full detail of such a move. Across the world, there are many countries that do not have an income tax policy and thus the idea is not totally unfeasible.

However larger question is, does it really help the middle class particularly salaried class? The employer may reduce salaries citing that there is no income tax and hence take away salary remains the same. Thus salaried class wouldn’t be benefited whereas businessmen would be largely benefited. Also because of no income tax provision, there would be no tax audit. Some vested interest groups may take this opportunity to show their incomes inflated to prove their higher solvency to be eligible for greater loans. How the black money would can be contained in the absence of a tax audit. Of course, new ideas always welcome. Let’s see full detail of proposed abolishing of income tax & service tax.

Editorial NOTE: This article is categorized under Opinion Section. The views expressed in this article are solely those of the author and do not necessarily represent the views of In case you have a opposing view, please click here to share the same in the comments section.
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