The Central Government on Sunday rejected a proposal made by officials of the Indian Revenue Service (IRS) suggesting the government should increase taxes raising income-tax rate up to 40 per cent.
It also suggested imposing a super-rich tax and levy a four per cent COVID-19 relief cess to rebuild the economy post-coronavirus pandemic.
In a 44-page report titled FORCE, or Fiscal Options and Response to Covid-19 Epidemic, officials who refer to themselves as “Team Force” made a series of suggestions for revenue generation.
This includes increasing tax on the super rich to 40 per cent from the present 30 per cent and imposing higher tax on foreign companies.
They also suggested levying a Covid-19 Relief Cess of four per cent on those with taxable income of more than Rs 10 lakh to help mobilize revenue for funding the relief work.
However, the Centre rebutted the report terming it as ‘ill-conceived’.
It also said it was a ‘misconduct’ tantamount to an act of indiscipline.
It said the suggestions were neither sought and nor is it the Indian Revenue Service’s duty to prepare it.
The chairman of the Central Board of Direct Taxes to whom the report was submitted has been asked to seek explanation on the matter from the office-bearers of the association.
The government said it has taken a range of measures to help people and taxpayers tide over these difficult times and ‘will not hesitate to do more’.
Meanwhile, the Income Tax Department in a tweet said no permission was sought by the officers before going public with their personal views and suggestions, and said the act was a violation of extant Conduct Rules.
“It is reiterated that the impugned report does not reflect the official views of Ministry of Finance in any manner,” it tweeted.