Put a limit to Tax Exemption for advertizement costs and Donations to Political Parties
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Governments are formed to act as political institutions to make policies for the welfare of the people who elect them. Taxes, direct and indirect, are paid to the governments to make a corpus of finance along with natural and other resources mobilized for the welfare of the people. The greater this combined general exchequer, easier it is to plan spending on development and welfare projects. Loans are raised only as a lost resort when the planning expenditure exceeds to narrow the gap between expenditure and income.
There are no rebates in indirect taxes. But in direct tax statutory rebates and exemptions are allowed for individual and corporate tax payers to encourage promptness and honesty in paying direct taxes. As long as the tax rebates and exemptions are within a reasonable limit, the general exchequer is not adversely affected. So far as individual tax payers are concerned tax rebates are always kept within a reasonable limit. But this has been not so with corporate tax payers. In the name of giving incentives to industrial production, trade and commerce, business tycoons, corporate houses and entrepreneurs are allowed to enjoy huge amounts of tax rebates. All that they spend in the name of expenditure on promotion and development of their business, including advertisements, can be deducted without limit from their taxable income. In addition to this, there are other incentives like tax holidays, water, land, power, etc, at highly subsidized rates, if not free. All these take away an enormous amount of funds from the general exchequer that otherwise should have been spent on development and welfare projects for the general public.This also creates demand for raising loans to meet the deficit in planning expenditure.
The GST bill, among other things, further allows unlimited tax rebates for traders, on unlimited donations to political parties that will be made by corporate houses big and small. The net result is more funds will be drained out of the corpus of general exchequer, increased size of fiscal deficit, increased burden of huge debts for the general public, year by year. The union finance minister professing to increase tax revenue and to enlarge tax net by GST has actually made bigger holes in the already leaking pot of Indian economy.
As the traders and corporate houses invariably transfer all their costs to the buyers and consumers positioned at the bottom and thus stand to gain doubly both by huge tax rebates and profits at the cost of the general public. In a democracy like ours development and welfare of the people, not business tycoons and corporate houses, are to be the prime concern of any elected government.
So, to protect the interests of the general public, to narrow fiscal deficit, to avoid debts and to keep the Indian economy robust and strong, the unlimited tax rebates and exemptions for the corporate tax payers should be done away with.
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