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July 30, 2014

Follow the Bengal model of tax collection: Derek O`Brien tells Union Finance Minister in Rajya Sabha

Chief Whip of the party in the Rajya Sabha,Derek O'Brien today spoke on the Finance Bill, 2014. In his speech he said thatthe party has already raised five important issues – Finance Commissionrecommendations for debt-stressed states, debt moratorium for West Bengal, theissue of black money, sharing of taxes between the Centre and the States and33% of Indians belonging to the poorest of poor – during the debate on theUnion Budget.

In his speech, Derek O'Brien said that therewas hardly any difference between BJP and Congress and described this syndromewith the PC = AJ equation. He said that the Finance Minister could have gotmore fiscal space to hold the hand of the suffering middle class who have beenbattling double digit food inflation and jobs drying up for 2 years.

He advised the Government to re-look at thenumber of super-rich. Mr O'Brien also asked the Finance Minister to take intoconsideration the recommendations of the Standing Committee that suggestedhiking the tax exemption limit to Rs 3 lakh and 80 (C) exemption to Rs 2 lakhfrom the current Rs 1.5 lakh limit.

Mr O'Brien also asked the Finance Ministernot to penalise individuals in the capital gains in 12 months and rather put acap. In the sector of Corporate Social Responsibility (CSR) he suggested thatto encourage smaller companies to do welfare the 2% tax should be waived. Healso argued that the pre-condition for making appeals in case of Central Exciseand Service Tax could make income tax officers greedy and was hence dangerous.

“There has to be a tax culture. You need toreward high profile tax payers, you need to award corporate. Please look at thetax culture and remove this fear psychosis,” Mr O'Brien advised the government regardingtax reforms.

Before concluding, Derek O'Brien cited thewhopping 87% growth in revenue collection in Bengal between 2011 and 2014 andasked the Centre to follow the Bengal model of e-taxation and bettercompliance. “This has worked in a State and I am sure this would work if put totest at the Centre,” he said.

Click here for the full transcript of Derek O'Brien's speech.