After Indian Revenue Service (IRS) officers suggesting a 40% increase in income tax for those who earn over Rs 1 crore and a 4% COVID-19 cess on taxable income over Rs 10 lakh , now former Karnataka CM HD Kumaraswamy suggested imposing 'COVID cess' on ultra rich to partially offset revenue loss due to coronavirus lockdown.
Kumaraswamy took to Twitter and said, "According to RBI and international economic assessment agencies, the GDP growth rate of the country is expected to fall to a historic low. Such a dire situation calls for citizen centric measures like full or partial waivers of EMIs, rents, school fees and other levies."
"The economy won't bounce back within a very short period. It is important to lower the cost of living as spending power of the consumer has depleted. The govt must cut the petrol/diesel prices. The loss of revenue may be offset partially by imposing COVID cess on the ultra rich," he added.
He further said, "It is high time the government announced schemes to save livelihoods of people, especially those in the unorganized sector. The government must provide immediate relief to farmers, construction workers, cab & auto drivers, garment workers, etc."
Earlier, in a policy paper-cum- recommendation titled "Fiscal Options and Response to COVID-19 Epidemic (FORCE)" presented to the PMO and Finance Ministry, the IRS officers have said that the Government needs to spend considerably more to revive the economy; and b) it needs to raise additional revenue, but in ways that must not burden the already distressed common man.
From raising the income tax rate to 40% for those who earn more than Rs 1 crore a year, imposing COVID-19 cess of 4% on taxable income over Rs 10 lakh, re-introduction of wealth tax, to direct cash transfer of up to Rs 5,000 per month to the poor- these were some bizarre recommendations made by 50 'young' IRS officers to the Modi government in order to the revive the economy which has been hit by the coronavirus pandemic.
Later, Finance Ministry sources said that neither IRS Association nor any group of officers mentioned in the said report were ever asked by the Government to give any report on the subject. In fact, it was not even part of their duty to prepare such a report, they said.
Even the Income Tax Department has taken to Twitter to clarify that it never sought such a report from either the IRS Association or these officers.