When Nirmala Sitharaman took down MPs on super rich tax hike
When Finance Minister Nirmala Sitharaman spoke in Parliament today in response to the debate on the Finance Bill, she made it clear that the government wasn’t going to roll back a hike in income tax on the rich. “The super-rich should contribute more to society and nation-building,” she told the Lok Sabha. But it isn’t only in the House that the finance minister has had to hear parliamentarians crib about the higher tax.
It is learnt that the Finance Minister has also faced a certain degree of pressure from other MPs for her proposal to raise the surcharge on income tax for the super rich. The increase implies that the tax liability of people who earn Rs 2-3 crore annually will go up by 3 percentage points. It will go up by 7 percentage points for those who earn more than Rs 3 crore.
HT has spoken to several MPs who confirmed that the tax is creating considerable heartburn among them too, not just in the opposition but also within her own party. In fact on July 10, some of these MPs also spoke to the minister in Parliament’s Central Hall about the tax and why the government felt the necessity to introduce it.
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HT spoke to two of those MPs who were present at the informal meeting that took place in Parliament complex. They include at least three women MPs of the BJP, one lawmaker from BJP’s alliance partner, and other male BJP MPs. There were also a few more from non-NDA parties.
Some of these MPs are high-net worth individuals.
They were discussing the “super-rich” tax when someone spotted Sitharaman and drew her into the conversation. “What was the need to bring this in?”
The Finance Minister heard them out about their concerns. When Nirmala Sitharaman spoke, she didn’t mince her words when she addressed them. She said: “You are worried only about the 5,000 people who are impacted by this. The Prime Minister has to worry about the 130 crore other people”.
In an interview to HT last week, Nirmala Sitharaman had said that the need to introduce this high tax was “driven by the need to part-raise resources for important and essential government expenditure.’’
However, she also told HT that “ideally” the 42.7% peak income tax should be brought down. But she made it clear that this may only happen over a period of time. “We have to see when the timing is proper for this,” she had underscored.
The MPs who had heard the minister’s explain the rationale for raising the super-rich tax declined to comment on how they took the minister’s blunt response. One of them said on condition of anonymity, “We are never heard. What has the Indian state given to these tax payers? First of all, everything that you do is looked with a magnifying glass”.