During the closing minutes of the Lok Sabha session today FM Arun Jaitley proposed a novel amendment to the 2015 finance bill that will attempt to regularize black money transactions by taxing bribes, signalling a radical departure from the PM’s “na khaoonga, na khane doonga” mantra.
Highlighting the urgent need to bring the as-yet-unsatisfactorily-quantified black economy into the financial mainstream, the amendment seeks to impose a ‘bribery’ tax’ on all functionaries of the three branches of government as well as on any third parties involved in the execution of activities falling under governmental purview. As the FM elucidated in his speech to parliament “taking shortcuts is an inescapable part of human nature and in cognizance of this fact, the prime minister and I both strongly feel that rather than attempting to curtail corruption, a far greater fiscal benefit can be realized by the nation by instead legally condoning it and enabling the government to effectively capitalize upon it.”
Elaborating further upon the motivation behind the proposed new tax, the FM stated that, “the nature of corruption in India is such that it invariably ends up manifesting as an illegal transfer of black money in return for a forfeiture of legally mandated procedure. In line with this definition, we are proposing a blanket tax of 30% over and above income tax (which will remain unaffected) on profits earned by all recipients of bribes, while also offering a tax exemption to parties at the paying end of the transaction. “The idea is not to shame officials into refusing bribes; quite to the contrary, we wish to incentivize bribery so that everyone can partake in it in a fair and open manner.”
Responding to opposition concerns over the current lack of transparency in underhand dealings, the FM replied that the Aadhar program would be fast-tracked in keeping with the PMs Digital India mandate and issuance of receipts against bribes received would be made mandatory and linked to Aadhar numbers of all transactors involved. “That way, we can keep an accurate track of monies paid and received as bribes in order to be able to effectively levy taxes and offer exemptions commensurately.”
Taken by surprise by the unorthodox proposal, Rahul Gandhi had this to say to the press afterwards: “I am yet to figure out how this will affect women empowerment and RTI. Once I do, I’ll have a more detailed criticism to offer.”