Abolish Professional Tax
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Article 276 of the Constitution permits States to levy Tax on Professions, Trades, Callings, and Employment. Though the Article restricts the levy to a maximum of Rs.2500/- per annum, the levy has now outlived its objective. Moreover, tax on income from salary or profession (other than income tax) is uncalled for and in violation of an individual's fundamental right to earn a living.
The GST Bill has now subsumed a plethora of Central and State levies which will have a multi-fold effect in terms of reducing compliance, improving ease of doing business, reducing the cascading effect of taxes, etc.
The enactment of the GST Bill is likely to increase the tax revenues for States (with revenue losses, if any, to be borne by the Center for 5 years). With the Indian economy on the upswing, the income and consumption growth will bring much more revenue to the States, and therefore such small yet irritable taxes must be scrapped.
Abolishing Professional Tax will:
1) Increase income in the hands of the low income salaried individuals, and small traders.
2) Improve "ease of doing business" index for all States concerned.
3) Eliminate an unwarranted monthly and annual compliance burden for employers.
4) Boost Demand - assuming that all states put together collect 20-30k crore per annum from Professional Tax, the same would find its way into the economy as consumption.
5) Have limited impact on the revenue collection of the States. To exemplify, the collection of Professional Tax in Maharashtra in 2015-16 was a meager 2169 crore.
6) Reduce the administrative load on the State Departments which are gearing to switch to the GST regime.
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