KOCHI: Bank transaction tax can effectively replace income tax, corporate tax and even GST, ranging from 5% to 28%. It will avoid tax evasion, ease inflation and fetch ample revenue to the central and state governments for development.
Certain taxes, like import and export duties, may be retained. Now a situation has arrived where only some people are paying income tax without any flaws. The same is not the case with other businessmen and professionals.
Corruption is a well defined term everywhere as the government also seems equally responsible for it. B.T.T. has not been introduced in the present budget.Long term preparation for three or four years is necessary.
How can it be introduced? After demonetising the notes above Rs. 500 and making all transactions digital through banks obeying Reserve Bank norms, B.T.T. can be introduced for deposit and withdrawal of money.
How much will this be roughly? Less than two percent only because the same money is taxed a number of times for the same and different persons. But an expert committee is to be constituted for this study. Recommendations brought are discussed in the parliament and state assemblies and the conclusions are implemented.
B.T.T. is to be shared between the central and state governments. Food and essential commodities will become cheaper on removing GST and payment of high capitation fee can also be detected.
The question arises as to how can all notes be withdrawn when people are suffering from recession. There should be legal understanding with all foreign nations regarding this issue. Another question that needs to be answered is whether all the transactions can be made digital.
In India, out of the 130 crores of people, 34 crores are illiterate and 43 crores are BPL and 95 crores of people do not use internet. Only 12% of the population knows English. Digitalisation gives a golden opportunity to improve the fate of the have-nots. Swiping machines, smart phones and computers may be subsidised to the BPL.
But this cannot solve the issue, the devices should be efficient, easy to use and should have security. Alternate devices and arrangements should be there.
Main villain is the internet hacker. The bank should give compensation. Digital transactions must be free from service charges. If a mistake happens in an online transaction, there should be provision for correction. In this way, corruption can be minimised to a certain extent.