Abolish Income Tax and levy 8% GST - Dr. Subramanian Swamy

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Dr Subramanian Swamy, senior leader of the Bharatiya Janata Party (BJP) on Friday called for abolition of income tax and levy only one tax, the goods and service tax (GST) at 8% after bringing black money stashed abroad .He was speaking at a book release event organised by Moneylife Foundation and BSE in Mumbai.

Dr Swamy said, "For black money, there are two symptoms. One is flow and second is stock of black money. Prof Vaidyanathan's estimate of Indian black money stock is Rs65 lakh crore. Illicit wealth stashed in tax havens abroad by Indians should be declared as national wealth and directed to be transferred to India under the United Nations’ Convention on Corruption."

The International Convention Hall of BSE where the programme took place was filled to the capacity. The attendees included many eminent lawyers, chartered accountants and senior consultants as well.
While elaborating on how the black money can be used, Dr Swamy said, corruption had affected the economy, politics and national security. "Apart from bringing back the black money we need to prevent its creation. Abolishing participatory notes (P-Notes), personal income tax (I-T) and registration charges for real estate is one of the ways to curb creation of black money," he added.

Dr Swamy says, "Even today, the tax rates, in my opinion, are unacceptably high. We have a need to have a much higher savings and if you abolish income tax, there would less paperwork, which is there due to the exemptions. If you abolish the income tax, then you begin the new process where fresh generation of black money is going to be discouraged as a consequence."

According to the former cabinet minister, some of the black money is sent abroad, while some kept here in India and spent on buying and developing land, especially for building luxurious houses with Italian marble and luxury items. About 75% of our investment is allocated for luxury industry. Another way to spend black money was through P-Notes, where money deposited abroad via hawala route is brought back to as P-Notes and invested in the stock markets. This got boost with the Mauritius treaty and much more money sent abroad through hawala came back to India after this.

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