Finance minister Nirmala Sitharaman rules out hike in tax rates

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Finance Minister Nirmala Sitharaman has ruled out any hike in tax rates, ending speculation that the government may increase the burden on the common man even as it battles the Covid-19 pandemic.

“I have made the government’s position clear that the explicit and stated position of the Prime Minister is that we shall not increase any tax. In fact, in my media interaction, post Budget, I made it very clear that this Budget will not have anything collected in terms of increased taxes,” Sitharaman told The Hindu Businessline in an interview.

 When asked about rising inflation and the rise in prices of edible oil and pulses, the Sitharaman said prices of pulses will cool down. On edible oils, she said the government is monitoring the situation.

“The Group of Ministers on essential commodities has been meeting to take timely steps to keep prices under control,” she said.

She further noted that the import of pulses is being permitted. There are also countries with which we have MoUs to bring in pulses.

On the sensitive issue of hike in fuel prices, she said: “The global situation on oil prices is worrying. Also, consider the exchange rate, what it was in 2014 and what it is today. All these influence the price of petrol-diesel.”

“Even as we speak, prices of Brent and the Indian basket are going up…. in the range of $73-76 per barrel.”

Answering a particular question on merging 12 and 18% GST rates into 15%, she said, “Not just merger of these two rates but entire rate rationalisation has to be looked at…. But I requested the GST Council that its meetings should not become an opportunity to play around with rates.”

If rates keep changing every three months, businesses cannot plan their taxation nor can the Central and State governments, she said. “I had suggested that just as the Budget is the time to consider changes to direct taxes and other duties, the GST Council also go for a rate consideration once a year.”

Making the government stand on cryptocurrency clear she said the government has done a lot of thinking about this and also they have done meetings with various stakeholders and took their inputs as well. She said the plan is ready, it is just now on the Cabinet for its consideration. She added that at least some trials will be allowed for fintech. The final decision rests with the Cabinet, she said.