Saturday, November 30, 2019

A New Tax Reform –Benefit for All!!


Introduction:

As the preparation for the 2020 Budget will kick start in few weeks, proposing this idea to Government which might be useful not only to individual tax payers but also to the organizations and Administration.

One of the biggest challenge we are facing in any major Indian city is Traffic. We are spending hours while commuting to work, wasting manpower, burning fuels, creating pollution and ending up with frustration and ill-health.

The measures taken by authorities to improve the situation is only a small step. Major problem is how to involve all the stakeholders in addressing this issue.

With creation of new type jobs from late 90’s, the once so called luxury and dream purchase –two and four wheeler has become a common commodity.Cheap loans from banks is also pushing more vehicles in to road.

It is becoming very common to have one or two personal bike / car and not to depend on the public transport. With increasing salary it is also easy to afford and maintain as it is only a part of the income earned.

Peak hours traffic shows the above examples – big cars with single person driving occupies majority of jams and in between are numerous bikes trying to squeeze in, either on road or pavements. This is common especially in front of IT Parks and Industrial Areas.

Many of the companies are also providing bus facilities as part of their benefit schemes, however very few employees are using it. If we question what makes them not to use such facilities – most of them will talk about being independent and also to some extent social status.

This is not only creating chaos on the road but also causing India a big lose in terms of fuel import to keep feeding these vehicles.  Approximately India imports 82% of its oil need at a staggering cost of $ 112 Billion!!

No matter how much road expansion we keep doing, if there is no control on the number of vehicles on street, it will never solve the problem or rather we might end with only roads all over!! This obviously causes destruction of greenery, water-body and complete ecology resulting in deteriorated health.

Suggestion:

Mayor of Colombian capital Bogota once said “A developed country is not a place where the poor have cars. It's where the rich use public transport” we need to encourage more number of people to go for such modes.

With lakhs of employees commuting daily to their workplace, why don’t we encourage employers / organizations to provide Bus / Cab facilities to their employees and motivate employees to use it?

To boost this, as part of tax structure can we introduce below scheme:
  • Individuals  using public transport / mass transit / company provided cabs or buses should be given tax rebate as part of their income tax rebates
  • Companies which provides bus / cabs to their employees should be given corporate tax benefit while they are filling their annual returns.

General mindset of commoner is to save money whenever such offers are made from Government. If it is part of incomes tax rebates, sure more number of people will start subscribing for mass transport. Even companies will encourage it since they will also get tax benefits. 

Government will not be under loss due to such schemes, because it will be saving in millions by reduced fuel consumption resulting lower import of oil. Cost of expanding roads and environment destruction can also be avoided.

Yes, this might reduce demand in automotive industry for newer personal vehicles however it will create employment for trained drivers and mass vehicles.

This might be only a small suggestion, which will have challenges to implement, however, with tumbling environment condition, there is urgent steps to be taken by Corporate and Government to safeguard the larger interest. Let’s brainstorm them….

(Postscript - While writing this blog remembered about an article which I discarded without publishing in 2012-13, only to see it became a big news after few years and regret I didn’t publish.

Title was - Make in India vs Made in India..!!

Even now I am not sure if this proposal is best, however recording it here for any future reference, as there is need for alternative for sure)

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