Banking transaction tax has BJP's backing, says Ramdev

Claiming in principle support of BJP for abolition of income tax and excise duty, Yoga Guru Ramdev today said the new taxation structure proposed by him is equitable and will effectively check black money menace.
Brushing aside the criticism, he said, the new taxation which would be based on a Banking Transaction Tax (BTT) is equitable and would be made a big issue in Lok Sabha polls.
Once fully implemented, the proposed system would generate more that Rs 40 lakh crore per annum for the exchequer as against about Rs 10 lakh presently, he said, adding this would happen without taxing the workers and farmers.

"The BTT will replace the income tax, excise and other levies. It also has the in principle backing of the BJP," he told reporters here.
The components of the new taxation structure include five to seven slabs of BTT ranging from 0.10 per cent to 30 per cent; demonetisation of the currency notes of Rs 500 and Rs 1,000 and just distribution of tax proceeds to centre, states and local bodies.
On whether the BJP was agreeable to his proposal, the Yoga Guru said that he talked about it with BJP president Rajnath Singh, Leader of Opposition in Rajya Sabha Arun Jaitley and former BJP president Nitin Gadkari and they were supportive.

"We will make it a big issue in the forthcoming Lok Sabha elections," he said, adding the new system would eliminate the problem of black money.

Ramdev further said the structure proposed by him was progressive as rich and the corporates engaged in manufacture of luxury goods, liquor and tobacco would have to pay higher taxes.
In the new scheme of things banking transaction tax would be levied on receiving transaction at different slabs on manufacturers of goods, service providers and traders, Ramdev said.
As regards the distribution of proceeds, he said, centre and states could be given 40 per cent each of the total proceeds, local bodies 18 per cent and banks 2 per cent.

The money provided to the banks could be used for expanding the banking network in the country, he said, adding, such a step would help in promoting financial inclusion.