The Left parties have suggested to the government that the base of direct taxes should be increased and efforts should be made to keep increases in indirect taxes at the minimum, since, they argue, these are inflationary.
Left leaders raised the issue at the last steering committee meeting of the United Front and they are likely to raise it again at the next meeting scheduled for February 9.
To increase the tax base, the Left leaders have asked the government to consider taxing rich farmers and imposing presumptive taxes. However, they want those earning less than Rs 60,000 a year to be left outside the tax net.
CPI secretary D Raja yesterday said that efforts should be made to increase wealth tax and property tax. I am not saying that indirect taxes should not be increased. This is not feasible. But since it is inflationary in nature its increase should be checked. The base of direct tax should be increased instead.
He added that although the finer details of the budgetary proposals were the finance ministers prerogative, its broad framework must be in accordance with the UF common minimum programme.
While CPI leaders favour a national debate on taxing rich farmers, CPI(M) politbureau member Sitaram Yechury had said clearly that they should be taxed.
CPI leaders say that, since land is state subject, the Centre cannot take decision on taxing agricultural income. They point out that when the Sarkaria Commission was in existence, it had sent a questionnaire to all state governments for their views on taxing rich farmers but no consensus emerged.
At the last steering committee meeting also, Left leaders spoke of generating alternate resources. CPI general secretary AB Bardhan mooted the idea of imposing presumptive taxes. He said that many companies and professionals, like doctors and lawyers, did not pay taxes by fudging figures. It was imperative that such persons should be taxed, he argued.
The presumptive tax would be levied on the presumed productive capacity of companies or individuals and it would leave very little room to evade taxes, he argued.
Left leaders had said that there were many loopholes in the present tax system and only one per cent of the countrys population was in the tax net.
They also argued for the continuation of minimum alternate tax (MAT) and said that zero tax paying companies should be made to pay taxes.
