- Adequate revenue with Government through Banking Transaction Tax. (भारत की सभी सरकारों को जितना टैक्स आज के मौजूदा सिस्टम से मिलता है, उससे कहीं ज्यादा टैक्स इस नयी कर व्यवस्था से मिलेगा) .
- Government debts will be recovered. (सरकार के पास पैसा होने से सरकार अपने सारे कर्ज वापस दे पायेगी जिससे रूपये की कीमत फिर से बढ़ेगी और रुपया अंतर्राष्ट्रीय बाज़ार में लीड करेगा)
- Decentralized revenue availability at all government levels (सभी राज्य सरकारों के पास पैसा सीधे आएगा, उन्हें केंद्र सरकार पर निर्भर नहीं होना होगा, टैक्स कलेक्शन में से सीधे राज्य के पास उसका हिस्सा जिससे पैसा राज्य सरकारों के लिए हर वक़्त मौजूद रहेगा.)
- Empowered Government – Cleansed political system (सरकार मजबूत होगी, राजनीती देशहित व् जनहित में होगी)
- High value cash transactions not possible. (नकदी में बड़ी डील नही होंगी)
- Opportunities for fake currency eliminated. (नकली नोट का धंधा लगभग खत्म हो जायेगा)
- Black money is eliminated. (काला धन नही रहेगा. क्यूंकि जब टैक्स ही देश में 2% का होगा तो कोई भी व्यक्ति टैक्स से भागेगा नहीं, या यूँ कहें की टैक्स से बचने का कोई कारन ही नहीं होगा )
- Banking revenue increased, cheap & ease of capital supply with interest rates as low as 3% for all types of loans (बैंक का कार्य बढेगा क्यूंकि सब कार्य बांको के माध्यम से होंगे, बांको के पास ज्यादा पैसा आएगा तो बाज़ार में वो भी लोन सभी को सस्ती दरो पर दे पायेंगे जिससे भारत अंतर राष्ट्रिय बाजार के ब्याज दर तक पहुँच जायेगा, देश में ऋण सस्ता होगा तो महंगाई और गिरेगी, और लोगों के लिए जिंदगी आसान होगी.)
- Sufficient and appropriate subsidies will be given (सब्सिडी जहाँ जरूरत होगी गरीबी के आधार पर उनको di जाएगी)
- Tax burden relieved. (टैक्स बोझ नही लगेगा)
- Purchasing power increased across society. (सभी लोगों की खरीदने की क्षमता बढ़ेगी.)
- Building individuals credibility.
- Social security for every individual.
- Industries growth will boost.
- Employment generation.
- Prices will fall down appropriately.
- Opportunities for corruption eliminated.
- Dependency on anti-social industries will not exist.
- Business’s focus shifting to innovation from Tax manipulation.
- Globally competitive business possible
- All existing taxes are replaced by a single transaction tax on banking transactions.
- High denomination currency (say above Rs.50) is abolished.
- A legal provision is made to restrict cash transactions to say, Rs.2000.
- All existing high denomination currency gets deposited in the banking system and a transaction tax is deducted on it.
Withdrawal of high denomination currency and a cap on cash transaction amount render high value cash transactions unviable. This will direct most transactions through the banking system. As the total banking transactions grow, a tax will be collected on each transaction and there will be a multifold rise in government revenue at all levels.
Money used for all day-to-day transactions is termed M1 or Narrow money. This is nothing but the sum of all currency in circulation and all derivative deposits that is, bank money created through credit expansion.
We have an M1 of Rs. 11, 00,000 crores for 2008-09. Now look at the left hand column in the chart. It shows the total revenue of the Centre and States for 2008-09, and we see its composition as a sum of revenue receipts and capital receipts, amounting to Rs.16, 46,000 Crores. Out of this, revenue receipts are about 10, 17, 000 crores.
After implementation of our proposal, all high denomination currency which makes up 90 % of our value would be deposited into banks as primary deposits. Thereafter, this money would be ‘white’ in every sense of the word. Moreover, the old taxation system would have been replaced by the simple and almost negligible transaction tax. Since there would be no reason or incentive to evade, the money would start moving freely within the system – for consumption, investment or into savings. Whatever the purpose, every transaction would generate a transaction tax.
Assuming that only twenty percent of this money moves once every day, the revenue generated over a year for Centre and States combined would be Rs. 10,44,000 Crores plus import duties, as against the Rs. 10, 17, 000 Crores all inclusive yielded by the existing system.
By the same logic, the revenue yield for a transaction ratio of 40% would be Rs.20, 88, 000 Cr., for a ratio of 60% would be Rs. 31, 32, 000 Cr. And for 80% it would be Rs. 41, 76,000 Crores!
These estimates of revenue are extremely conservative as well, since they have been made using the M1 as a fixed number, whereas M1 is essentially a dynamically changing number. As the primary deposits start moving, they will start creating derivative deposits and this will send total M1 upwards with every transaction!
What this means is that the notional tax rate of 2% may not be required – the actual tax rate to fulfill our needs could be lesser than 1% or even 0.5%!
Take a look at these figures for the Mumbai Municipal Corporation –
The actual Cheque clearances in Mumbai region in 2007-08 amounted to Rs. 36, 85, 400 Crores. Share of the local government at the rate of 0.35% as proposed would generate a revenue for Mumbai Municipal Corporation to the tune of Rs.13,000 Crores, as compared to 8,550 Cr. collected by the present system through dozens of taxes, duties and octroi.
It is therefore obvious that by shifting the tax base from entities and goods and services to banking transactions, it is possible to generate a tremendous amount of revenue, without stressing out the tax payer. This is no miracle – it is sheer arithmetic. All we are doing is shifting and increasing the tax base exponentially – thereby reducing overall incidence of tax on the citizen.
The government has abundant funds and the leaking taxation system has been repaired.
Government debts are repaid on priority. The Fiscal deficit is history. These two factors will empower the Government dramatically and we shall see massive changes coming in. Overhaul of the taxation system will simplify collection of revenue beyond imagination. This is already a proven fact – in the last financial year, the Government collected almost Rs. 9,000 Crores without any paper work and hassles through the Securities Transaction Tax alone. Collecting that much money through the other taxes would entail back breaking paperwork, wouldn’t it?
This ease of collecting revenue will practically finish all opportunity for corruption and merge the parallel economy with the formal one. All black money will become white and remain white. There will be no incentive for generation of black money thereafter.
This will have a direct and immediate impact on all anti-social and anti-national elements. Their purchasing power will be destroyed forever and all subsequent movements will become traceable through the banking system. The menace of fake currency will be brought to an end once and for all. All this will effectively paralyze enemies of society and the nation and the process of restoration of social security will begin.