We need reforms, not whimsical taxes

The state government’s mid-term move to burden distressed people with additional taxes to raise money for drought-mitigating measures smacks of an insensitive approach to fiscal management

The state government’s mid-term move to burden distressed people with additional taxes to raise money for drought-mitigating measures smacks of an insensitive approach to fiscal management. It is well accepted that luxury items are taxed higher, so that essential items can be made available at lower costs. But this time, the state has invited the public ire by levying a surcharge of R2 per litre on petrol and diesel. Do they fall in the luxury category?

In fact, a surcharge on fuel would translate to increased cost of essential commodities that are mostly transported by road. More taxes on fuel would also mean a huge loss to filling stations situated on the state borders. Vehicles exiting the state or coming in may not necessarily buy fuel from the stations in Maharashtra. Will this not incur further losses to the state exchequer?

We, in no way, advocate excessive consumption of liquor or cigarettes, but we learnt that a proposal to charge a higher tax on liquor was opposed by Revenue minister Eknath Khadse, who raised a valid point in Wednesday’s Cabinet meeting. He argued that people would consume spurious liquor if alcohol sold at legitimate shops was taxed more. Other senior ministers dismissed his suggestion, stating that liquor lovers wouldn’t mind spending more when they need ‘shots of alcohol’.

We fail to fathom the logic for levying additional taxes because of impending losses in view of abolition of Local Body Tax. We’re also told that people in drought-affected areas, for whom R1,600 crore is to be collected in five months, will end up paying more than urban counterparts, who no longer have LBT.

People who intended to buy gold jewellery, because of falling rates, are also upset. They may scrap their plan to invest in gold. Not everyone smokes cigarettes or consumes liquor, but the extra cost of aerated drinks will affect many. These items cost 5% more, starting yesterday.

We ask the government how long it will continue to find easy targets for raising revenue, instead of applying reforms to fill the state coffers.

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