New Delhi: Hours after a group of Indian Revenue Services (IRS) recommended a super-rich tax and a higher levy on foreign companies to keep the cash running as part of short term measures to help the government fight the coronavirus pandemic, the Centre rejected the proposal saying it was a “highly irresponsible” act of few officers. Also Read - Funding COVID-19 Fight: Tax Officers Suggest 40% Tax on Super-rich, Higher Levy on Foreign Companies
It added that a disciplinary action has been taken against the officers for releasing “unauthorised” recommendations in the media and that they will need to explain their conduct, Hindustan Times quoted finance ministry officials as saying on Sunday. Also Read - Employees Can Opt For New Tax Regime by Giving Declaration to Employers, Says CBDT
“An ill-conceived report named as ‘FORCE’ put up by a group of officers through IRS Association giving suggestions on increasing the taxes, etc., in the difficult time of Covid-19 pandemic and releasing the same in the media through IRS Association’s twitter and website is ‘an irresponsible act’ of few officers,” the official said. Also Read - Centre Eases Deadline on Tax-saving Investments, Extends Validity Till June 30
“The concerned officers will have to explain their misconduct,” the official told the leading newspaper.
Notably, the paper was prepared by a group of 50 IRS officers.
In the paper, the group suggested that the ultra-rich should be taxed through two alternative ways which can be imposed for a limited time. One, up the highest slab rate to 40 per cent on income of over Rs 1 crore from 30 per cent now and two, re-introduce wealth tax for those with a net wealth of Rs 5 crore.
For the medium term, 9-12 months time period, the paper suggested raising additional revenue from foreign companies operating in the country by hiking the surcharge on their income from the present 2 per cent for Rs 1-10 crore and at 5 per cent on incomes exceeding Rs 10 crore.
They also called for imposing a COVID-19 cess to help mobilise additional revenue. The one-time ‘COVID Relief Cess’ of 4 per cent can help finance capital investment, as per the paper.