Anil Bokil of think-tank ArthaKranti Pratishthan says the UP election victory will embolden the government to introduce a Banking Transaction Tax that would replace all other taxes.
Anil Bokil of think-tank ArthaKranti Pratishthan, the man who suggested the idea of demonetisation to Prime Minister Narendra Modi, thinks that the Bharatiya Janata Party's thumping mandate in UP will embolden the government to undertake an unprecedented and radical reform on the taxation front.
Speaking to CNBC-TV18, Bokil said the UP verdict proved that the common man had welcomed last November's note ban and was in favour of socio-economic change.
He said the government would now have the courage to take steps to rationalise taxation and make it simple and transparent.
At the very least, Bokil said, the government could introduce a Banking Transaction Tax (BTT).
BTT, pitched by Bokil in the past, is a proposed method of taxation which would be charged on all forms of bank transactions – credit and debit.
The tax would be charged on both cheque payments and electronic methods of transactions. The tax would be collected by government and equally distributed between Centre and the respective state where transaction took place.
It entails the abolition of all other taxes barring custom duty.
Bokil said the abolition of income tax could still be in the offing despite Chief Economic Advisor Arvind Subramanian arguing against it. Bokil feels that as few Indians pay income tax, it contributes very little to the coffers and doing away with it could help check black money.Watch video for more...