<b>Letters:</b> End tax exemptions

In the piece, “Data crunching: Are we a nation of tax avoiders?” (February 28), Ishan Bakshi holds the gamut of tax exemptions — including farm income being kept outside the tax net — largely responsible for the country’s low tax to gross domestic product ratio. 

Bakshi cites relevant statistical data to drive home his points by taking into account other emerging economies apart from the taxation situation prevailing in BRICS economies. In addition, he talks about the multi-layered taxation regime, which comes under the exclusive domain of state governments in India, and how that could possibly have escaped the World Bank’s estimates. 

Bakshi’s main grudge against the low tax base is mainly in respect of the high exemption limit with reference to average per capita income and the underlying structure of the Indian economy. 

Who is responsible for creating such an army of tax avoiders in India? Why were there so many official incentives to evade and avoid taxes? Is it not the government’s lack of courage deal with the situation emerging on the ground? Why have successive governments continued mixing politics with economics?

Finance Minister Arun Jaitley did not offer much palliative to most people save lowering the first tax slab from 10 per cent to five per cent in Budget 2017. He actually took away with one hand all that he proposed to give with another hand, by shrinking the eligible category from an income of Rs 5 lakh per annum to Rs 3.5 lakh per annum. The maximum benefit that senior citizens would get (with an income cap of Rs 5 lakh) is Rs 2,500 only. 

If the government means business, the charity should begin at home. 

It should immediately withdraw all existing tax exemptions granted to ministers, members of Parliament, Assemblies and Legislative Councils, by issuing an executive order.

“Pay as you earn” should be the sole criteria and all citizens should be treated on a par on tax matters.

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