Baba Ramdev pushes for banking transaction tax to replace all taxes

Written by Surabhi Rastogi | Surabhi | New Delhi | Updated: Jan 18 2014, 00:56am hrs
Baba RamdevBaba Ramdev is set to meet chartered accountants, industry chambers and economists to discuss his economic and taxation agenda. Reuters
Yoga guru Baba Ramdev on Thursday outlined his policy prescription that involves replacement of most direct and indirect levies with a banking transaction tax and de-monetisation of currency notes of Rs 500 and Rs 1,000 to help ease inflation, improve employment generation and also lower corruption.

While calling on political parties to support his proposals, Ramdev however ruled out contesting the general elections.

I am only seeking political will and honesty from all to parties to implement this alternative economic and taxation policy, he said.

The yoga guru also said that the Bharatiya Janata Party (BJP) has not retracted its support from his tax proposals. It is still principally in agreement but has said that some of the tax proposals are not possible or progressive enough, said Ramdev, adding that he has discussed his proposals with BJP leader Arun Jaitley.

Ramdev is also set to meet chartered accountants, industry chambers and economists to discuss his economic and taxation agenda and also seek comments to fine tune his proposals.

The crux of his vision is simple: replace all taxes except import duty with a banking transaction tax that would be levied on all transactions received into bank accounts at rates varying between 0.10 per cent and 30 per cent. He has also proposed differing tax slabs for various industries such as textiles, FMCG, oil and liquor.

Farmers and labourers would be exempt from the tax and the burden on tax payers would ease by about 30 per cent, he said. This in turn would also help lower prices, improve employment opportunities and thereby eradicate poverty, he said.

Ramdev also called for doing away with large cash transactions and instead using electronic payment modes to curb black money and corruption. This would also help deduct the proposed BTT, he said, adding that Brazil had also tried a similar experiment.

Significantly, when asked how donations to trusts such as his Patanjali Yogpeeth Trust would be taxed, he said his proposals need to be further discussed, debated and sharpened.