The Arthakranti Proposal

Okay, so I am pretty much behind times to be discussing this one. Right before the elections last year, the Arthakranti proposal had become a major topic of discussion that had us considering the idea of a single tax system for the country. Quite a lot to think about!

For the uninitiated, the Arthakranti proposal (by a Pune based organization) basically suggests the abolition of all existing taxes (except customs duty) and replacing them all with one Single Tax – the Banking Transaction Tax. Transactions above a certain minimum limit (say Rs.2000/-) will only be through banks and each of them will attract taxation. The idea of only one tax – is alluring, inviting. The idea of all money being routed through banking – a check on hawala, money laundering – is very, very interesting.

But as it is with most good and radical ideas, the actual implementation and impact is something different. And difficult to gauge. And that is where the critics have rightly pointed out its many flaws.

Here we are, struggling with GST, even when everybody seems to like the idea. And to consider BTT at such a time – it would be like expecting a  financial revolution. Our economy, policy makers, banking system and even the general population (who are used to financial jugaad for avoiding tax payment) – is unprepared for such an idea.

And yet, the fundamental concept seems nice – a single system of taxation for one and all. For a society where everyone is equal (even economically), it would make sense. But for today, it seems utopian.

Like the idea of voluntary payment of taxes – you decide how much tax you would like to pay. Well, that would be unrealistic. But at least they can let us choose the deductions we want to take – give us some options that we can choose from.

In another scenario, if they could give us an option to decide where at least part of our taxes would go – like the road in our neighbourhood that we want repaired. That would give us some sense of ownership.

Even simply showing us where our taxes went – complete transparency in itself would give us some comfort. I believe that Indian taxation has a long road ahead, it has to and will evolve as times change. For now, lets keep hoping that ideas like these keep breaking out to keep our country’s financial think tank on its toes.

PS: Do suggest ideas that appeal to you as well.

Link: http://www.arthakranti.org/proposal