NEW DELHI (TIP): With mounting criticism over the proposal to introduce a tax on bank deposits and abolish all other levies, yoga guru Baba Ramdev, who is one of the key proponents of the new regime, on Thursday tweaked the plan and suggested separate slabs for salaried as well as industries, while suggesting a tax amnesty scheme as a pre-cursor. Suggesting that the reform proposal will take a year, “provided there is political will”, Ramdev said that in the first phase the government will need to develop banking infrastructure, do away with currency notes of Rs 500 and Rs 1000 and also introduce a tax amnesty scheme, something that the Supreme Court has frowned upon.
Although he recognized that getting states on board may be a tough task, he suggested that states and the Centre should get 40% each of the mop up, while local bodies will have a share of 18-19% and the rest will go to banks that collect the tax. Ramdev said that his proposal is different from the one being pushed by ArthaKranti, a Pune-based think tank, which has suggested a 2% levy. “You need slabs for it to be successful and equitable. The tax rate can be 0.1 or 0.2% to 30%, with a higher levy on alcohol and tobacco and an exemption for farmers and labourers,” he said in a bid to deal with criticism from BJP leaders like Arun Jaitley. Some BJP leaders had initially backed the proposal to move to a new tax regime, but have now backed out saying that the proposal is flawed.