BUSINESS
In contrast, indirect tax collection, linked to economic activities, has fewer spikes
Is there a case for abolition of the direct tax in India and replace it with, in absence of any currently known alternative, a Banking Transaction Tax (BTT)?
The Economic Survey for FY18 has made an interesting observation.
"Unlike in other countries, reliance on direct taxes in India seems to be declining, a trend that will be reinforced if the Goods and Services Tax proves to be a buoyant source of revenue," the report tabled in Parliament says.
Except for urban local governments which generate 44% of their total revenue from own sources, the states generate a low 6% of their revenue from direct taxes while the figure is 19% in Brazil.
Another feature of direct tax collection is that it is highly skewed towards the end of a financial year, in March with a mid-year spike in September.
In contrast, indirect tax collection, linked to economic activities, has fewer spikes.
This brings us to the radical concept of BTT, which, according to Arthakranti, a Pune based think tank.
Conceptually, the BTT appears to be a simple tax which can be implemented at a low rate. This makes it sound like an attractive replacement for the present regime of taxes which are complex, impose considerable compliance cost on the taxpayer and are besieged with problems of evasion and avoidance.
But according to National Institute of Public Finance and Policy, while some Latin American countries do have BTT, they haven't replaced direct tax.
Moreover, the effective tax liability of the tax would be considerably higher than the proposed headline rate of 2%. The effective rate of tax for organised manufacturing comes to 14.3% with a 2% BTT, where a range of activities would have effective tax rates higher than 20%.
Meet Arvind Kejriwal’s daughter, who cracked IIT-JEE Advanced, went to IIT Delhi, now working as...
'Kohli never said a word': Pakistan's Haris Rauf on Virat Kohli hitting sixes against him in...
Bengaluru to witness hottest summer says IMD, recorded season’s highest temperature at...
Ranveer Singh to venture in production amid box office slump? plans to make...
Where to Buy Testosterone in the USA? Top 3 Best Brands of Testosterone Cypionate in 2025
Pregnant woman employee gets Rs 1 crore compensation after being fired through...
ELECRAMA 2025: Powering the Future of Energy
Steroids for Sale in the USA: Buy Steroids Online in 2025
How to Choose Trenbolone for Sale Online? Review of Popular Trenbolone Manufacturers
Remedium Lifecare Lands Rs 182 Crore Multi-Year Contract: Stock Set for Major Upturn
Former ISRO chief AS Kiran Kumar visits Goenka Temple, expresses hope for successful Mars mission
Anil Ambani's Rs 9831 crore company set to enter NEW space, makes key...
Vladimir Putin's BIG warning to Ukraine, will negotiate only if...
347 rooms, Rs 22400 crore worth: India's most expensive wedding venue is located in...
Woman constable carries baby on duty, RPSF says, 'she serves, she...', video goes viral
'Caught Red-Handed': Cognizant accuses Narayana Murthy's Infosys of stealing THIS secret in...
'Bharat Jodo Vivah': Wedding invite of Jammu's daughter, Kerala's son wows internet
Pavitra Rishta fame Usha Nadkarni cries inconsolably as she remembers her brother's death, watch
MASSIVE discount on Apple iPhone 16, iPhone 15, check here how to grab this deal
Juhi Chawla takes holy dip at Mahakumbh 2025, calls it 'most beautiful morning in her life'
Deepinder Goyal's Zomato launches first AI product ‘Nugget,’ says will give it for free to…
Champions Trophy 2025: 5 major records that Virat Kohli can break in this tournament
Shweta Basu Prasad says she was bullied on Telugu film set: 'I was called...'
Gujarat: Lion brings traffic to a halt at Bhavnagar-Somnath highway, watch viral video
India's Got Latent row: SC grants interim relief from arrest to Ranveer Allahbadia
Tesla begins hiring in India after PM Modi-Musk meet, announces multiple job roles in...
Gurugram woman shares interview experience at Zomato, CEO Deepinder Goyal reacts, says...
'Sir ek kiss ho jaye': Paps unleash a horror welcome on Udit Narayan
Salman Khan, Sanjay Dutt REUNITE for Hollywood thriller, filming begins in Saudi Arabia: Report
Gujarat: Videos of women patients leaked on Telegram, YouTube, probe ordered
South Korean actress Kim Sae-ron found dead at home, cause of death revealed
Canada: Delta Airlines plane crashes at Toronto Pearson airport, flips upside down, several injured
Meet Gyanesh Kumar, IIT graduate, who becomes new Chief Election Commissioner
DNA TV Show: RSS' Bihar model ahead of Assembly elections in state
WPL 2025: Renuka, Wareham spark collapse as RCB bowl out Delhi Capitals for 141
Champions Trophy 2025: Ex-Pak cricketer says Pakistan don't deserve to win, 'Chal jaaye toh...'
Samantha Ruth Prabhu's Dippam Dappam dance leaves Chennai students awestruck, viral video
Breaking MS Dhoni's record is no big deal for Dinesh Karthik: 'It’s not something...'
Amid Mahakumbh rush, video of vehicle running on railway track goes viral; here's why
Who is Rohit Chopra? Indian-origin businessman called arrogant by JPMorgan CEO Jamie Dimon
All eyes on Mohammed bin Salman, as Trump, Putin and Zelensky set to meet in Saudi Arabia for...
WATCH: BJP office bearer dances to ‘Main Hoon Don’ flashing gun, FIR filed
Nepal student death: Massive protests at Odisha's KIIT University, students demand justice
Meet man, son of famous film actor, cracked UPSC exam with full-time job, his AIR was…
Mahakumbh 2025: Fire breaks out again at Prayagraj, no casualties reported
Gautam Adani, India's second richest man, donates Rs 2000 crore for setting up 20...
‘I am not a...’: Jaya Kishori BREAKS silence on her Rs 2.6 lakh Dior bag controversy, WATCH here