Chidambaram looks at increasing taxes on the rich

Tags: Economy
The government should consider higher taxes for the "very rich", Finance Minister P. Chidambaram said in comments that could worry India's tycoons, many of whom say such a move would stifle entrepreneurship in Asia's third-largest economy.

The government is under pressure to raise more taxes to contain the widening fiscal deficit and to fund welfare programmes following a fall in tax collections due to slowing economic growth - seen slipping to a decade-low level this fiscal year ending in March.

"We should consider the argument whether the very rich should be asked to pay a little more on some occasions," Chidambaram told CNBC TV 18 news channel in an interview aired on Thursday.

Chidambaram did not say who should be included in this category and nor did he say whether he would support such a move. Currently, the top tax rate of 30 percent applies to taxable income above 1 million rupees.

The finance minister also said he believed in "stable tax rates" but he did not rule out future changes to tax rules.

There has been growing debate on the issue of increasing taxes on the wealthy ahead of the 2013/14 budget, which Chidambaram is due to present to parliament on February 28.

Prime Minister Manmohan Singh's economic advisor C. Rangarajan suggested last month that government could consider either raising the tax rates or imposing a surcharge on income tax paid by the super rich.

Azim Premji, chairman of India's third-largest software exporter Wipro, said at a gathering of business leaders in Davos on Wednesday that he was not against higher taxes for the wealthy in principle.

Post new comment

E-mail ID will not be published
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.

EDITORIAL OF THE DAY

  • It’s another challenging year for a govt that’s missed 20 of 24 targets

    The government has set an ambitious target for money to be raised through sale of public sector company shares.

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

Sarthak Raychaudhuri

vice-president, HR, Asia South Whirlpool of India

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

TODAY'S COLUMNS

BK Chaturvedi

Corruption law calls for correction

In any country, it is its laws against corruption that ...

Kuruvilla Pandikattu SJ

Believers of the world set to rise

The world is set to become more religious as the ...

Gautam Gupta

The changing face of the fashion world

Indian fashion industry, like every fashion industry in the world, ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture