Greater tax on the super rich to reduce the burden of the middle class
The income secretary Ajay Bhusan Pandey defends the highest surcharge in the super-rich and suggests that the increase in collection can create a margin to reduce the burden of the middle class in the future. In an interview with Sidhartha, Rajeev Deshpande and Surojit Gupta from TOI, explains the idea of making BREAD - Aadhaar interchangeable. Extracts
Are taxpayers asked to pay more taxes when many of them report their income?
• The need to include all income in the tax network is not linked to this measure. Even if this tax were not there, we would have to persecute those who evade taxes. Both things must be done. Let's not mix the problems. Let's not stray from the subject in question. If you create a high net worth individual class (HNI) and start charging taxes differently, you have the ability to grant differential treatment to the middle class.
There is also the argument that nations that charge high taxes, such as Sweden or the Netherlands, provide services from the cradle to the grave, such as education and health. This is not the case in India.
• The rich can not complain that they are not giving birth to funeral services. This country is providing a range of services. Warren Buffett's health bills are not being subsidized by the government of the United States. A rich person in India is not dependent on the public Health System . As for the super rich, they get the same facilities anywhere in the world. You can not say that the government is not giving enough to the poor, so do not tax me.
It is also said that people can dodge this new tax or even relocate the companies and themselves.
• There may be some of that, but it can not be the central point in policy making. Even now the tax rates are lower in Dubai or Singapore. With regard to the personal income tax, this is where we also have to see to what extent one should be intimidated by some unknown fears of people moving on a large scale to another country. If there is evasion, we will have to counteract it. The tendency to evade could be greater, but we have to be severe.
How many individuals will be affected by the new surcharge ?
• Some 7,000-8,000 people.
There are reports that the actual rate will be up to 50%.
• This is incorrect. The department is dealing with this speculation and will clarify it.
What is the reason behind doing BREAD & Aadhaar Interchangeable cards?
• A lot of BREAD cards have been generated. We can’t stop them suddenly. For some time, both will have to continue as ID documents. If a person uses Aadhaar to file I-T returns, he can then get a BREAD card. I won’t say Aadhaar will replace BREAD . I won’t encourage that. People should have a choice. Aadhaar is a basic biometric ID. There will be a large number of people who will prefer to use BREAD .
Has the movement gone beyond the SC judgment?
• Not at all. The two-judge bench upheld linking BREAD to Aadhaar . This was confirmed by the five-judge constitution bench. The matter is settled. We have allowed Aadhaar to be used voluntarily, this does not violate the Aadhaar Act.
But those undertaking high value transactions & who don’t have BREAD will have to share their Aadhaar number?
• In transactions where BREAD is needed & you don’t want to produce it, then Aadhaar may be required. If you don’t have a BREAD then generate one or exercise the option of Aadhaar . If you want to buy jewellery, generate BREAD . Making a purchase is not an emergency service.
The overall fiscal objective has been reduced from the provisional budget. Is it realistic?
• We have taken a realistic view. There is no widespread increase in taxes. We only have the surcharge on the super-rich which will get us an additional Rs 12,000-13,000 crore & levies on oil will get us Rs 32,000 crore annually.