Every request for exemption has the support of one or more Members of Parliament - FM

By Vijay Kumar

Yesterday, in his speech, the FM revealed a secret which he thinks is not a secret – Every request for exemption has the support of one or more Members of the Parliament. He said “My endeavour has been to increase the effective rate of corporate tax paid by corporations, but my efforts are stalled because of demands for continuing exemptions or introducing new exemptions. I think I would not be revealing any secret if I say that every request for exemption has the support of one or more Members of this House, irrespective of political affiliations. In my view, the way forward is not to increase tax rates but to remove the exemptions. In the last four years, I have succeeded to some extent in removing exemptions or imposing sunset clauses, but I cannot say that I am fully satisfied. Work on this regard would have to continue. Eventually, we would have to move towards a system of taxation where the exemptions are few, each exemption is reviewed periodically and each exemption comes to an end after a reasonable period of time. I am confident that the new Income Tax Code that will be placed in the public domain for discussion will reflect my philosophy in this regard and I hope that, in due course, the new Income Tax Code will, after deliberations, become law.