Discussion of the bill took place by deferring the time normally allotted for private Members’ bills in the House
Discussion of the bill took place by deferring the time normally allotted for private Members’ bills in the House
Union Finance Minister Nirmala Sithararaman, responding to the debate on Finance Bill 2022 approved by the Lok Sabha on Friday, blamed the Russia-Ukraine conflict for soaring fuel prices, claiming that India, unlike many Developed countries have not raised taxes to fund pandemic spending and economic recovery.
To counter opposition criticism of high inflation and the lack of any tax breaks for the middle class in the 2022-23 budget, Ms Sitharaman recalled a speech by India’s first Prime Minister Jawaharlal Nehru, in which he described the Korean War in the face of soaring food prices in 1951 held responsible. and the late Prime Minister Indira Gandhi’s decision to raise income tax rates sharply in 1970.
The passage of the bill with 39 amendments, including clarifications on the taxation of virtual digital assets and the non-recognition of duties and surcharges as business expenses, paves the way for the government to implement the provisions of the Union budget from April 1.
Discussion of the bill took place by postponing the time normally allotted for private Members’ bills in the House and Ms Sitharaman explained that this was necessary as this was the last week of March and ministries are ideally able to should be to receive their funds by this date April 1st so that planned spending can begin soon.
Noting that the finance bill highlights how the government, led by the Prime Minister, has made a “conscious decision” not to collect taxes during the pandemic or to fund the recovery from it. Citing an OECD report, Ms Sitharaman said at least 32 countries including Germany, France, the UK, Russia and Canada have increased various tax rates during the COVID-19 pandemic, while India has not.
“The guidance I received in preparing last year’s budget and this year’s budget was that we will not go down the taxation route. As a result, this financial law was adopted as one of the boring and boring, without anything great. But I think it’s indeed a budget that doesn’t weigh on the common man but puts the money where the multiplier would be maximum and there would be infrastructure creation of assets with a huge increase in spending,” she said.
Commenting on MPs’ comments on lower corporate tax rates, Ms Sitharaman said the tax cuts announced in September 2019 had actually helped business, government and businesses.
“In 2018-19 our corporation tax collection was only about Rs. 6.6 lakh crore then COVID happened… Despite this reduction and the COVID impact we have already collected a corporation tax of Rs 7.3 lakh crore as of yesterday so the Corporate tax cuts have rewarded us despite last year’s COVID-hit,” she explained, adding that improving corporate health could also lead to more employment.
Responding to MPs’ comments that the government is sending out mixed signals on regulating the virtual digital currency, Ms Sitharaman said, “There is no confusing signal. We are very clear. Discussions are underway as to whether we should regulate it heavily, lightly, or ban it altogether. After the deliberations are complete, the matter will come out. But until then we are also taxing it because a lot of transactions are happening and this is common knowledge based on member comments.”
She stressed that the Withholding Tax (TDS) provisions for virtual digital assets were not a new tax, saying that as always, this was useful for tracking purposes.
“(TDS) is one of the reasons India’s tax base has widened. We had about 5 million taxpayers in 2014, which now reaches 9.1 million because we are able to follow the money trail of people who appear to be spending but don’t pay when they have to pay taxes,” the minister said and noted that this also reflects the results of the fight against black money in the economy.
