The Centre on Sunday rejected a proposal made by officials of the Indian Revenue Service suggesting the government should increase taxes to cushion the economic fallout of the coronavirus pandemic. The Centre called it “an act of indiscipline”, NDTV reported.
In a 44-page report titled FORCE, or Fiscal Options and Response to Covid-19 Epidemic, officials who refer to themselves as “Team Force” made a series of suggestions for revenue generation. This includes increasing tax on the super rich to 40% from the present 30% and imposing higher tax on foreign companies.
“The estimate for gross tax revenue for 2019-2020 was revised lower to amount Rs 21.6 lakh from Rs 24.6 lakh crore announced in the previous budget,” the report said. “Even for the upcoming financial year 2020-’21, there is a target of 12% increase in the gross tax revenue at Rs 24.2 lakh crore. However, the slowdown in economy coupled with Covid-19 will dent the revenue collections especially in direct taxes.”
They also suggested levying a Covid-19 Relief Cess of 4% on those with taxable income of more than Rs 10 lakh to help mobilise revenue for funding the relief work.
However, the Centre rebutted the report and said it was a “misconduct” tantamount to an act of indiscipline. It said the suggestions were neither sought and nor is it the Indian Revenue Service’s duty to prepare it.
The chairman of the Central Board of Direct Taxes to whom the report was submitted has been asked to seek explanation on the matter from the office-bearers of the association.
The government said it has taken a range of measures to help people and taxpayers tide over these difficult times and “will not hesitate to do more”.
Meanwhile, the Income Tax Department in a tweet said no permission was sought by the officers before going public with their personal views and suggestions, and said the act was a violation of extant Conduct Rules. “It is reiterated that the impugned report does not reflect the official views of Ministry of Finance in any manner,” it tweeted.