‘No Assembly session to discuss new taxes’

Kochi: Finance Minister K.M. Mani has ruled out the possibility of convening the state Assembly as demanded by  Opposition Leader V.S. Achuthanandan for debating the decision taken by the state government to impose fresh taxes.

“There is no question of convening the Assembly,”  the minister told reporters  here on Friday. He  also iterated that the state was not facing any ‘economic crisis.’  The state was  passing through only economic difficulties, he added.

Mr. Mani also ruled out  bringing out a White Paper on the economic situation in the state. He  blamed the expenditure incurred on non-budgetary proposals for the  economic difficulties.

He  said that the government would  collect the tax arrears in a time-bound manner. According to the CAG report,  the state government has to collect tax arrears to the tune of Rs 12,243 crore as on March 31, 2013.

Although Mr Mani ruled out convening the  Assembly to discuss the tax proposals,  the demand for a reconsideration of the decision has gained traction within the ruling front.

KPCC president V.M. Sudheeran  told reporters in Thiruvananthapuram that the government should reconsider the decision. He said that the KPCC would submit a report to the government after studying the new tax proposals. He, however, said the call given by the CPM to boycott the taxes was anti-democratic.

CPM state secretary Pinarayi Vijayan said  the forms of protest against the increased taxes would  be decided  by the people themselves. Addressing a meeting at Perumbavur in the district on Friday, he said the UDF government was imposing unbearable taxes on the people.

Meanwhile, the government’s decision to increase the tax rates of water and the fees of various government services, including registration, is a retrograde step that would only help  tax evasion, said leaders of industry and trade.

The Cochin Chamber of Commerce and Industry is distressed by the government  decision to increase the water  taxes  and other service fees to augment its revenues, said its president C.P. Mammen.   

“We urge the government to review its decision and come out with a transparent policy on the alternative revenue streams through which the state plans to narrow the revenue expenditure gap and also  consult the  stakeholders before unilaterally proposing such tax hikes,”  he added.  

Although he was not opposed to hike in the taxes on alcohol and tobacco, the rate hike on drinking water by 50 per cent was not justified, he said. The government decision would  lead to tax evasion and smuggling, said Mr T. Nazirudeen, president, Kerala Vyapari-Vyavasai Ekopana Samithi.

The tax for cigarette was only 15 per cent in states like Karnataka, he said and added that a person bringing cigarette worth '5,000 from the neighbouring state in train can sell it for '7,000 here. “Instead of increase in revenue, the decision will bring down the income,” he said.

Kerala Merchants Union state treasurer P.S. Paul said the government had imposed additional taxes using a false propaganda about the economic crisis in the state.
Revenue loss on account of closure of bars was minimal as income from bars constitutes less than 20 per cent of the total income from alcohol sales in the state, he said. Loss of income from bars would  be offset by the increase in income from sales in the Bevco outlets, he added.