Curious case of a report suggesting coronavirus tax on super-rich

This is the curious story of a report that suggested raising the highest tax slab rate to 40 per cent for income above a minimum threshold of Rs 1 crore or re-introduction of wealth tax for those with a net wealth of Rs 5 crore or more to help pay for the coronavirus economic fallout.

New Delhi: A group of 46 under-training and recently commissioned tax officers pen a paper calling for taxing the super-rich and foreign companies to pay for fighting coronavirus pandemic, their association promptly forwards it to the government and posts it on Twitter only to clarify in less than 24 hours that the work doesn't reflect the opinion of entire revenue service officers and an apparently unhappy government said an inquiry will be launched.

This is the curious story of a report that suggested raising the highest tax slab rate to 40 per cent for income above a minimum threshold of Rs 1 crore or re-introduction of wealth tax for those with a net wealth of Rs 5 crore or more to help pay for the coronavirus economic fallout.

About a third of the 46 Indian Revenue Services (IRS) officers, whose name appears in credits in the 43-page report, had joined the service in 2018 and 2019 and should have been undergoing the mandatory two-year training at Nagpur-based National Academy of Direct Taxes (NADT) that is headed by senior tax officer Alka Tyagi.

Though IRS Association in its tweet on April 25 evening said "almost 50 young" officers had submitted policy suggestions, the paper gives credit to 46 officers including two senior 'guides' and six other 'mentors'. The senior most mentor is a 2014 batch officer. 23 contributors to the report are from 2015 to 2018 batch and 15 participants are 2018 and 2019 batch of IRS.

While Prashant Bhushan, General Secretary of IRS Association, who had forwarded the report along with a fore note to the top tax policy-making body Central Board of Direct Taxes (CBDT) on April 23, did not answer phone calls made for comments, the association president Binoy K Jha initially agreed to talk on the subject but did not answer phone calls thereafter.

Meanwhile, on Monday the CBDT has written to the IRSA seeking explanation as to why the association had made public the report by these IRS officers without permission of the Board.

None of the writers of the report could be immediately reached for comments but tax department officials had varied views on the reports.

One senior official posted in national capital did not see anything wrong in young and fresh-out of college officers giving suggestions on tax policies. But another official posted in Mumbai said it needs to be seen how and who brought these 46 young officers together for doing the report.

"Maybe some senior official on the verge of retirement is trying to score brownie points by becoming the 'messiah' of Indian economy," he said, refusing to give details.

Another official said it was curious how the IRS Association immediately forwarded the report to CBDT and even officially posted in on Twitter. "The disclaimer they issued almost a day later could have been issued when the report was first made public," he said.

The verified Twitter handle of the Association had on April 25 evening posted: "Almost 50 young IRS officers submit policy suggestions for reviving India's economy, post COVID-19." The handle posted the full 43-page paper titled 'FORCE' or Fiscal Options & Response to COVID-19 Epidemic on April 26 morning.

But as the suggestion drew flak from Twitterati who said governments around the globe are offering stimulus in form of tax cuts to deal with the COVID-19 crisis, the IRS Association by evening clarified. "The paper FORCE by 50 young IRS officers suggesting policy measures had been forwarded by IRSA to CBDT for consideration. It does not purport to represent the official views of the entire IRS, or the IT Dept," it said.

The Income Tax Department also in a tweet said the report did not reflect the official views of the CBDT and the Finance Ministry. It said an inquiry was being launched into why the report was shared with the public.

"There is some report circulating on social media regarding suggestions by a few IRS officers on tackling Covid-19 situation. It is unequivocally stated that CBDT never asked IRS Association or these officers to prepare such a report," the department tweeted late on Sunday evening. "No permission was sought by the officers before going public with their personal views & suggestions, which is a violation of extant Conduct Rules. Necessary inquiry is being initiated in this matter".

"It is reiterated that the impugned report does not reflect the official views of CBDT/Ministry of Finance in any manner," it said.

Bhushan had written a one-page foreword when he sent FORCE report to CBDT chairman and members.

"The CBDT had sought feedback from our field formations across India on the ideas for revival across various sectors of the economy," he wrote on April 23.

(PTI Report)