Abolising Taxes.. Arthakranti Proposal of an alternate Government revenue model

Today I received an whatsapp message about an organisation called Arthakranti Sansthan, which is proposing an alternate to the existing financial governance for the country. The message can be read at the end of this blog post.

Normally, I do not read long whatsapp forwarded message but this message had a line that attracted my attention. It said, "Scrap all 56 Taxes including income tax excluding import duty". 

From the day, I have become an entrepreneur, taxes have been a big hindrance to my business model in terms of maintaining accounts and paying taxes. The current tax structure is simply too complicated. I believe we should pay taxes and contribute to the overall growth and development of the country. However, it was an easy belief system till the day I worked in the corporate world of TDS, where tax is deducted by the company giving you absolutely no trouble in terms of paying your taxes rightfully.

After I have started my business, taxes have been my biggest hurdle. At one end, I simply can't forge and evade taxes. At the other end, paying tax rightfully is a complete pain in the ass. For instance, I have not met a single sales tax consultant who is willing to accept my proposal of paying sales tax rightfully every month. They all say, you should not worry about taxes till your business gets an annual revenue of over a crore. We will manage your taxes (by evading it and bribing the sales tax officials).

So a proposal of an alternative tax structure was a dream come true for me. I continued reading the Whatsapp message. It had a list of FIVE point of actions:

1. Scrap all 56 Taxes including income tax excluding import duty.
2. Recall and scrap high denomination currencies of 1000, 500 and 100 rupees.
3. All high value transaction to be made only through banking system like cheque, DD, online and electronic.
4. Fix limit of cash transaction and no taxing on cash transaction.
5. For Govt. revenue collection, introduce single point tax system through banking system – Banking Transaction Tax (2% to 0.7%) on only Credit Amount. 

As a banker (a decade of banking experience), I would say that it is a great long term idea that can change how a country is run. It will be perhaps the first idea of governance that India has not borrowed from the West. Even our constitution is a borrowed cut and paste job!

From a consumer perspective, the head-ache of paying taxes and the guilt of not paying taxes will completely go away. Whatever money would come to the bank, 2% (or less than that) would be automatically taken out. The accounting hassle will lie with the bank and they have the talent to do the same.

The decision to scrap the higher denomination currencies is also a great idea to discourage cash transactions. It will increase card based transactions at shops and other business establishments. I would be saved of the hassle of going to the bank to deposit cash standing in a queue. I would be saved of the hassle of giving change back to the customers.

For the Government, there will be those fews banks to reconcile the revenue collection.

No taxing on cash transaction is also a boon for the poor. Although it sounds like a double edged sword benefitting the cunning businessmen and the capitalist as well, yet I would support any policy that will primarily help the poor in their day to day life.

One of the most corrupt departments in Assam is the Sales Tax Department. This new model will completely stop departmental corruption at the tax collection level. It will also stop other kinds of corruption which mainly survives on cash transactions. Without high denomination currencies, under-the-table cash transactions will be severely affected.

Having said all that, I have one point of discussion. I believe that all policies should aim for an egalitarian society for peace and prosperity. It should try to create greater or equal opportunities for the poor as well. As we know that India is corrupt, not because our rules and structures are weak, but because our conscience and dharma allows us to become selfish and corrupt, so it is pertinent that this new taxation model should not have loophole for the rich to become richer by evading taxes.

For instance, I am not doubting that banking penetration can be increased and every citizen will be part of the banking structure in the future. I am doubting our mentality to evade taxes and therefore will always carry on cash transactions avoiding taxes completely. Even if the Government put a limit on cash transaction (say Rs. 2000), will that stop the citizens to carry out cash transactions?

One thing is certain that it will help the small businesses who earn less than Rs. 2000 a day. We surely have a huge percentage of people living in that kind of earning per day across the country. The moot question however is whether it will stop economic polarity, the difference between the rich and the poor, the difference between the haves and the have nots.

Whatever said and done, a large scale national debate should start on this idea and quick actions should be taken by the Government.


WhatsApp Message:

Mr.Arun Bokil , one of the key member of Arthakranti Sansthan was given time to share to PM Modi before recent election. He was given 9min for sharing but Mr Modi heard him for 2 hrs.

“Arthakranti Sansthan” is an Economic Advisory body constituted by a group of Chartered Accountants and Engineers. Arthakranti Proposal is an effective and guaranteed solution of Black Money Generation, Price rise and Inflation, Corruption, Fiscal Deficit, Unemployment, Ransom, GDP and industrial growth, terrorism etc.

“Arthakranti Proposal has FIVE point of actions simultaneously.

1. Scrap all 56 Taxes including income tax excluding import duty. 
2. Recall and scrap high denomination currencies of 1000, 500 and 100 rupees. 
3. All high value transaction to be made only through banking system like cheque, DD, online and electronic. 
4. Fix limit of cash transaction and no taxing on cash transaction. 
5. For Govt. revenue collection introduce single point tax system through banking system – Banking Transaction Tax (2% to 0.7%) on only Credit Amount 

Important Points to note:

1. As on today total banking transaction is more than 2.7 lakh crores per day say more than 800 lakh crores annually.
2. Less than 20% transaction is made through banking system as on today and more than 80% transaction made in cash only, which is not traceable.
3. 78% of Indian population spend less than 20/- rupees daily why they need 1000/- rupee note. 

What will happen if All FIFTY SIX Taxes including income tax scrapped :

1. Salaried people will bring home more money which will increase purchasing power of the family. 
2. All commodities including Petrol, Diesel, FMCG will become cheaper by 35% to 52% .
3. No question of Tax evasion so no black money generation.
4. Business sector will get boosted. So self employment. 

What will happen if 1000/ 500/ 100 Rupees currency notes recalled and scrapped :

1. Corruption through cash will stopped 100%.
2. Black money will be either converted to white or will vanish as billions of 1000/500/100 currency notes hidden in bags without use will become simple pieces of papers.
3. Unaccounted hidden huge cash is skyrocketing the prices of properties, land, houses, jewellery etc and hard earned money is loosing its value; this trend will stop immediately.
4. Kidnapping and ransom, “Supari killing” will stop.
5. Terrorism supported by cash transaction will stop.
6. Cannot buy high value property in cash showing very less registry prices.
7. Circulation of “Fake Currency” will stop because fake currency printing for less value notes will not be viable. 

What will happen when Banking Transaction Tax (2% to 0.7%) is implemented:

1. As on today if BTT is implemented govt can fetch 800 x 2% = 16 lakh crore where as current taxing system is generating less than 14 lakh crore revenue.
2. When 50% of total transaction will be covered by BTT sizing 2000 to 2500 lakh crores, Govt will need to fix BTT as low as 1% to 0.7% and this will boost again banking transaction many fold.
3. No separate machinery like income tax department will be needed and tax amount will directly deposited in State/Central/District administration account immediately.
4. As transaction tax amount will be very less, public will prefer it instead paying huge amount against directly/indirectly FIFTY SIX taxes.
5. There will be no tax evasion and govt will get huge revenue for development and employment generation.
6. For any special revenue for special projects, govt can slightly raise BTT say from 1% to 1.2% and this 0.2% increase will generate 4,00,000 crores additional fund!

Loving Mumbai - its spirit, its people, its conscience

Mumbai is my home. And I'm lovin it.

On the 3rd of January 2002 with my RX 100 on a train from Ahmedabad, I arrived in Borivali, Mumbai. From then, it has been such a positive ride.

Sure, I had my share of frustrations in the initial initiation to the big bad Mumbai. From getting the bike out of the Borivali train station to traveling in the local train to reach lower parel, the next 15 days were a nightmare. I was not used to such a fast life in Ahmedabad.

With optimism for life and no such great ambition, I started my journey to settle down in Mumbai, to get my rythm back and start my life.

In these 8 years, I moved from Borivali to Sewri (what a relocation; with of all that I had in my Yamaha to a place which is the other end of Mumbai), from Sewri to Shivaji Park, from Shivaji Park to Mahim, from Mahim to Sion and then to my own home in Tilak Nagar, Chembur.

Occupationally, I moved from advertising & media to making ad films, from marketing to online marketing to my current position of Head - Internet Banking, Deutsche Bank. Yes, I work in a bank handling technology after starting my career with an agency handling advertising.

Here, as surprised you might be as a reader, I am also surprised at the opportunities that Mumbai has given to me to discover myself, my talent and my latent interests. I followed my dreams and dreams became reality. With time, money ceased to be an issue for most of my waking hours. I do get greedy at times.

Now thats too materialistic a reason to love Mumbai. Thats not what I wanted to write today. I wanted to write about my experiences, my feelings with Mumbai in these 8 years of living here, of making such tectonic shifts in my life.

The essense is that I have never felt alone in Mumbai. I never felt insecure in Mumbai. It has given life to my will to hardwork, be good, have patience, have faith and keep going.

From that day in 2002, when I found a helping leg to push my empty tanked bike to the nearest petrol station to yesterday when I found a stranger helping my dad (a parkinson's patient) to walk in the dark theatre towards his seat (we were there to watch Aladin & I went ahead to find the row), I have so many good memories of Mumbai and its beautiful people that it fills my heart to become a better person myself. I wish thats an epidemic and everybody is therefore becoming a better person themselves.

Let me jot down a few of my everlasting memories of Mumbai:

# Borivali to Sewri for a 10 days old on a bike in Mumbai was tough. I didnt take a single wrong turn and I found my destination in around an hour and half. In Mumbai it seems nobody has time for anybody but I found time from everyone. Everytime I asked for directions from an autorickshaw driver to an office goer, I got clear directions. From dharavi, I actually found someone who told me to follow him till my destiny. He actually took an extra turn for me. It was such a great satisfying journey, which could have been the worst in my life with 3 bags in a RX 100 with no clue about road directions.

# I am a bit of a crazy bike fanatic. Once I stubborned my way to take my father to the hospital for his acupressure session. While returning, he was having problem in getting onto the bike. Two gentlemen came and help him get on the bike. It was good till then. On the way, he got uncomfortable and was not keeping his balance on the bike. I had to stop somewhere near Goregaon in the WE highway. The magic started then. In a matter of minutes, my dad was brought down from my bike, given water, a stool to sit and relax. After a good 15 minutes when my Dad was comfortable, they again helped him onto the bike and we reached home. I was overwhelmed beyond words. I decided to become a better man myself.

# The fact that I dont have to bargain when I get into an Auto / Taxi is such a relief that we can only realise when we go to Delhi/Bangalore/Chennai. There is of course a slight problem that I ocassionally face. The taxis standing close to office premises wont budge for shorter distances. Once it happened that two girls (quite good looking and so I was observing or you may say leering at them) were trying to hire a taxi. They tried the standing taxis. They didnt budge, so they started waving for the passing taxis. Suddenly I see these two traffic policemen riding a bike passing by the waving girls... What shock me is that they stopped after a few metres to instruct the closest taxi driver to take these girls wherever they wants to go. Now that changed my view about traffic police completely. It is actually such a good life sala.

# I am quite a party animal. And shoulder to shoulder brushes are quite common in any pub in Mumbai. So a few bad looks here and there is accepted to be quite common. For the past 8 years, I have only heard of a few pub skirmishes. I havenot seen them. In Delhi, every pub/party has one fight every night. I may be exaggerating a bit but fights, abuses and quarrels are so much lesser in Mumbai pubs. It is actually fun.

# Last night, in a fit of excitement I left my purse in a paan shop in Bandra. Can you believe that? Yes I managed to do that and fortunately remembered after about travelling 5 kms towards my home. Luckily I have the habit of checking for my purse and mobile every 10-15 minutes. I could only say "WTF, I am screwed." I reviewed my memory and the best chance was the paan shop we stopped. I am still under dis-belief that I have actually got back my purse. God bless the paan walla and I wish he open a paan shop chain and become a paan magnet. Really, that's how magnanimous my wishes are for him.

Let me not drag it now. Just one last line. Mumbai - its people, its spirit and its conscience is really something to be proud of and to be inculcated within.

Dont understand why we say BIG BAD MUMBAI sometimes.

UTI Bank is still UTI Bank in Goa

Just been to Goa on a workshop... had a lovely time... good weather... Goa is getting ready for the season.... most of the shacks and some of the bars were closed for renovation.... they were changing for the better..... lot of energy and newness was beginning to be seen........

However, UTI Bank was still UTI Bank in Goa...
All the UTI Bank ATMs that I saw in Goa are still UTI Banks.... the irony is that when I came back to my room... their ad snippet was playing on the TV... so much for a 360 degree campaign... look at the article attached....

http://digital.agencyfaqs.com/perl/digital/news/index.html?sid=18802

Is it a wrong media reporting or irresponsible PR from the desk of AXIS Bank...

Axis Bank - What a lost opportunity !!

I started my life with advertising and from then I have been witnessing the fight for marketing budget that marketing teams always used to crib about. Marketing team wants to do so much for the brand through mass media but where is the budget ?

Today I am witnessing an ironic spectacle when marketing budgets have been showered on to the marketing team for a mega relaunch of a brand due to legal stipulations. And the marketing team wasting the opportunity - the once in a lifetime opportunity for a mega brand building exercise.

I am talking about the multi-crore mass media splash being done by Axis Bank - the erstwhile UTI Bank.

The message of the campaign - UTI Bank = AXIS Bank.

I wonder why Axis Bank cannot be better than UTI Bank?

It seems to me that UTI Bank is very disturbed by this development that they are forced to change their name from UTI Bank to AXIS Bank. As if it is a big loss for them. It is a lightning that struck them and they are fighting to say that they are not hurt.

I would have taken the situation to advantage. It would have been an opportunity to claim that we are changing for the better.

I would have understood if ICICI Bank or SBI had made such a claim that they have not changed. They have quite a sizeable share of market to worry about consumer dissonance. But UTI Bank has only to gain by changing for the better !!!!

What a loss of opportunity?