Proposing major tax reforms like goods and services tax, the Bharatiya Janata Party on Friday wanted the United Progressive Alliance government to take a relook at 'regressive' levies like fringe benefit tax and banking cash transaction tax in the forthcoming Budget.
With most states implementing value-added tax sytem, the logical step would be to move towards GST instead of the current excise duty and services tax, BJP economic ideologue Jagdish Shettigar told PTI adding the Finance Minister P Chidambaram should unveil in the Budget a roadmap in this regard.
Maintaining that fringe benefits given to employees are business expenditures to extract better work from them, Shettigar said this regressive tax should be withdrawn.
Fringe benefits should be deducted as expenditure before arriving at a final figure for profits for the purpose of taxation, he said.
While Prime Minister Manmohan Singh talks of achieving 10 per cent growth, FBT acts as a dampener for industry to increase employee productivity, the BJP leader said.
He proposed withdrawal of the BCCT since he said the tax defeats its purpose of tracking black money as the levy deters people to take their money to the banking system and encourages them to keep it unaccounted, he said.
Shettigar recommended undertaking far reaching electoral reforms, including state funding of elections and transparency in the system of fund collection by political parties, besides reducing stamp duties to effectively curtail black money, Shettigar said.
The BJP would submit its wishlist to the government shortly, he added.
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