New Delhi: Union Budget 2022 is just around the corner. Common people are looking forward to seeing revisions in their income tax slabs. In all this, Subramanian Swamy has a suggestion for the government. While talking to Business Today, the economist said that he wants the government to abolish the income tax. This is not the first time he has said so. He has been an active proponent of removing income tax in India.Also Read - Got Salary Hike Recently? Employees Can Make These Investment Plans to Save Tax | Details Here
On being asked what he would do if he was the Finance Minister of India, he said that he would have abolished income tax for everyone from April 1. He further suggested that the banks should increase the fixed deposit interest rates from 6 per cent to 9 per cent. This would help the Indian economy to regain its lost ground. Also Read - PAN Now Made Mandatory In All These Bank Transactions Or Deposits/Withdrawals. Details Here
Why Does Subramanian Swamy Want Abolishing Income Tax?
According to Swamy, here are the key reasons for doing away with income tax in India Also Read - SBI Hikes Interest Rates on FDs; Check New Rates From May 10 Here
Swamy said that the savings of the households across the country have fallen due to high taxes. This has led to a lower investment because the majority of investments come out of savings. He said households have come to a savings rate of 36 per cent, down from 31 per cent. This has hurt the economy.
Swamy also said that the interest rates on lending are high in India. These should come down as it would lead to easy money in the country. People will spend more, reviving the economy in return. High income tax and high interest rates encourage people to spend less, eventually hurting the economy.
- Alternative Ways Of Government Income
According to Swamy, income tax collections in India amount to about Rs 8-9 lakh crores. If the income tax is abolished, the government can earn from other sources including auctioning of telecom licenses and coal auctions. He said that the government does not have any shortage of resources to raise revenue.
- Falling Economic Growth, People Unwilling To Pay Higher Taxes
The economy has been struggling even before the pandemic struck the world. According to Swamy, people are willing to pay more taxes if the economy is booming. It is not the case now.
- Struggling MSMEs, Higher Unemployment
According to Swamy, MSMEs get badly hit due to income tax and interest rates rising. Adding to this, he said that this gives rise to more unemployment. He pointed out that we have more unemployment as compared to 10 years ago. To bring MSMEs back on track, it is important to decrease interest rates and abolish the income tax, even if for a while.