Deprecated (16384): The ArrayAccess methods will be removed in 4.0.0.Use getParam(), getData() and getQuery() instead. - /home/brlfuser/public_html/src/Controller/ArtileDetailController.php, line: 150
 You can disable deprecation warnings by setting `Error.errorLevel` to `E_ALL & ~E_USER_DEPRECATED` in your config/app.php. [CORE/src/Core/functions.php, line 311]
Code Context


        trigger_error($message, E_USER_DEPRECATED);

    }
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 You can disable deprecation warnings by setting `Error.errorLevel` to `E_ALL & ~E_USER_DEPRECATED` in your config/app.php.'
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deprecationWarning - CORE/src/Core/functions.php, line 311
Cake\Http\ServerRequest::offsetGet() - CORE/src/Http/ServerRequest.php, line 2421
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Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65
Cake\Http\Runner::run() - CORE/src/Http/Runner.php, line 51
Cake\Http\Server::run() - CORE/src/Http/Server.php, line 98

Deprecated (16384): The ArrayAccess methods will be removed in 4.0.0.Use getParam(), getData() and getQuery() instead. - /home/brlfuser/public_html/src/Controller/ArtileDetailController.php, line: 151
 You can disable deprecation warnings by setting `Error.errorLevel` to `E_ALL & ~E_USER_DEPRECATED` in your config/app.php. [CORE/src/Core/functions.php, line 311]
Code Context


        trigger_error($message, E_USER_DEPRECATED);

    }
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 You can disable deprecation warnings by setting `Error.errorLevel` to `E_ALL & ~E_USER_DEPRECATED` in your config/app.php.'
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deprecationWarning - CORE/src/Core/functions.php, line 311
Cake\Http\ServerRequest::offsetGet() - CORE/src/Http/ServerRequest.php, line 2421
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Cake\Controller\Controller::invokeAction() - CORE/src/Controller/Controller.php, line 610
Cake\Http\ActionDispatcher::_invoke() - CORE/src/Http/ActionDispatcher.php, line 120
Cake\Http\ActionDispatcher::dispatch() - CORE/src/Http/ActionDispatcher.php, line 94
Cake\Http\BaseApplication::__invoke() - CORE/src/Http/BaseApplication.php, line 235
Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65
Cake\Routing\Middleware\RoutingMiddleware::__invoke() - CORE/src/Routing/Middleware/RoutingMiddleware.php, line 162
Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65
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Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65
Cake\Error\Middleware\ErrorHandlerMiddleware::__invoke() - CORE/src/Error/Middleware/ErrorHandlerMiddleware.php, line 96
Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65
Cake\Http\Runner::run() - CORE/src/Http/Runner.php, line 51
Cake\Http\Server::run() - CORE/src/Http/Server.php, line 98

Warning (512): Unable to emit headers. Headers sent in file=/home/brlfuser/public_html/vendor/cakephp/cakephp/src/Error/Debugger.php line=853 [CORE/src/Http/ResponseEmitter.php, line 48]
Code Context
            if (Configure::read('debug')) {

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        LATEST NEWS UPDATES | We should tax agriculture. But how? -Madan Sabnavis    </title>
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-The Hindu Business Line

While the idea is reasonable, the issue is so political that it will automatically ring in negative points for the implementer

The subject of taxation on farm income has once again taken centre stage not just because there..."/>
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-The Hindu Business Line

While the idea is reasonable, the issue is so political that it will automatically ring in negative points for the implementer

The subject of taxation on farm income has once again taken centre stage not just because there..." />
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                            <div align="justify">-The Hindu Business Line<br /><br /><em>While the idea is reasonable, the issue is so political that it will automatically ring in negative points for the implementer<br /></em><br />The subject of taxation on farm income has once again taken centre stage not just because there have been some distinguished opinions voiced on this subject but also that this has been recognised as one area where money is channelled to avoid paying taxes. As the focus of the Government is on black money, looking at agriculture for enhanced tax collection appears a logical corollary.<br /><br />The solution is evidently not simple for were it so, it would have been implemented by now. The major challenge is really political as any such tax would be interpreted as affecting the lives of 600-odd million people and can be perceived to be a disaster during elections. Logically one can argue that if we can sift the rich from the poor this can be done. But agriculture has a complex structure.<br /><br /><em>Pretty strong<br /></em><br />The arguments for taxing agriculture are compelling. It is just like any other economic activity: if individuals and companies can be taxed, so should farmers, provided they go beyond the exemption limit. All other reasons put forward for not taxing farmers are more emotion-based given that the majority would be classified as socially and economically deprived. But then, this can hold for other sections too which are being taxed, especially at the lower-income level.<br /><br />This said there are practical issues which have been hard to surmount so far. To begin with it must be realised that even if agriculture has to be taxed, it would be by the State as our federal structure would not permit the Centre to do so. The major problem is identifying the individuals given that many of them own small pieces of land or are landless labourers.<br /><br />The numbers involved are really large, some 600 million people. The latest data on tax collections shows that of the 42 million-odd people in the organised sector around 17 million are salaried and pay taxes. In the unorganised sector which has 56 million workers, another 18 million pay taxes. Hence, the strike rate for a population of 100 million workers is just 35 per cent. In the case of agriculture with 120 million potential assessees, it will be hard to identify them.<br /><br /><em>Tax what?<br /></em><br />The other issue is what can be taxed? Should it be value of output or the net income earned by farmers? While the value of output sold can be gauged and tracked to the extent that it enters the market, this is not net income as there are expenses incurred in growing crops which include seeds, fertilisers, water, and so on. Also for those owning equipment a depreciation value has to be imputed. This means farmers have to be treated on a par with companies or self-employed professionals and not income tax assessees. How can one draw up such a profit and loss account?<br /><br />Further, there is a lot of produce that does not enter the market and the marketable surplus can range from anywhere between 65 to 100 per cent depending on whether it is a food crop or a commercial product such as cotton and jute. Hence, a large part of the value will be hard to fathom on this score. Also there is a lot of under-reporting given the state of logistics in the country.<br /><br />There is hence an anomalous situation where there could be a considerable amount of money that is channelled here to escape tax by diverting funds to agriculture on paper or showing property owned as farmland which may be used for a penthouse. This is what needs to be plugged. To begin with this is what should be targeted by the department to weed out such leakages. This is akin to the amount siphoned out by the value-chain when it comes to food subsidy where ration shop owners sell grains in the open market and make fraudulent entries for this in their books. A way out is to tax the product which is presently also being done in some States through a mandi tax or something else. This tax will be finally passed on to the consumer who will then have to pay a higher price for the product. Such a move will ensure that the tax does not come in the way of the farmer&rsquo;s income. Strictly speaking this would be an indirect tax on commodities, like an excise or sales tax, which will get subsumed under GST. The income of the farmer will still be outside the ambit of income tax.<br /><br />Please <a href="http://www.thehindubusinessline.com/opinion/india-should-tax-agriculture/article9677312.ece" title="http://www.thehindubusinessline.com/opinion/india-should-tax-agriculture/article9677312.ece">click here</a> to read more. <br /></div>                                                           
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    <br><a href="http://www.thehindubusinessline.com/opinion/india-should-tax-agriculture/article9677312.ece" class="re" target="_blank">The Hindu Business Line, 2 May, 2017, http://www.thehindubusinessline.com/opinion/india-should-tax-agriculture/article9677312.ece</a><div class="clear"></div>
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        LATEST NEWS UPDATES | We should tax agriculture. But how? -Madan Sabnavis    </title>
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-The Hindu Business Line

While the idea is reasonable, the issue is so political that it will automatically ring in negative points for the implementer

The subject of taxation on farm income has once again taken centre stage not just because there..."/>
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While the idea is reasonable, the issue is so political that it will automatically ring in negative points for the implementer

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    <h1 class="cat-box-title">We should tax agriculture. But how? -Madan Sabnavis</h1>
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                            <div align="justify">-The Hindu Business Line<br /><br /><em>While the idea is reasonable, the issue is so political that it will automatically ring in negative points for the implementer<br /></em><br />The subject of taxation on farm income has once again taken centre stage not just because there have been some distinguished opinions voiced on this subject but also that this has been recognised as one area where money is channelled to avoid paying taxes. As the focus of the Government is on black money, looking at agriculture for enhanced tax collection appears a logical corollary.<br /><br />The solution is evidently not simple for were it so, it would have been implemented by now. The major challenge is really political as any such tax would be interpreted as affecting the lives of 600-odd million people and can be perceived to be a disaster during elections. Logically one can argue that if we can sift the rich from the poor this can be done. But agriculture has a complex structure.<br /><br /><em>Pretty strong<br /></em><br />The arguments for taxing agriculture are compelling. It is just like any other economic activity: if individuals and companies can be taxed, so should farmers, provided they go beyond the exemption limit. All other reasons put forward for not taxing farmers are more emotion-based given that the majority would be classified as socially and economically deprived. But then, this can hold for other sections too which are being taxed, especially at the lower-income level.<br /><br />This said there are practical issues which have been hard to surmount so far. To begin with it must be realised that even if agriculture has to be taxed, it would be by the State as our federal structure would not permit the Centre to do so. The major problem is identifying the individuals given that many of them own small pieces of land or are landless labourers.<br /><br />The numbers involved are really large, some 600 million people. The latest data on tax collections shows that of the 42 million-odd people in the organised sector around 17 million are salaried and pay taxes. In the unorganised sector which has 56 million workers, another 18 million pay taxes. Hence, the strike rate for a population of 100 million workers is just 35 per cent. In the case of agriculture with 120 million potential assessees, it will be hard to identify them.<br /><br /><em>Tax what?<br /></em><br />The other issue is what can be taxed? Should it be value of output or the net income earned by farmers? While the value of output sold can be gauged and tracked to the extent that it enters the market, this is not net income as there are expenses incurred in growing crops which include seeds, fertilisers, water, and so on. Also for those owning equipment a depreciation value has to be imputed. This means farmers have to be treated on a par with companies or self-employed professionals and not income tax assessees. How can one draw up such a profit and loss account?<br /><br />Further, there is a lot of produce that does not enter the market and the marketable surplus can range from anywhere between 65 to 100 per cent depending on whether it is a food crop or a commercial product such as cotton and jute. Hence, a large part of the value will be hard to fathom on this score. Also there is a lot of under-reporting given the state of logistics in the country.<br /><br />There is hence an anomalous situation where there could be a considerable amount of money that is channelled here to escape tax by diverting funds to agriculture on paper or showing property owned as farmland which may be used for a penthouse. This is what needs to be plugged. To begin with this is what should be targeted by the department to weed out such leakages. This is akin to the amount siphoned out by the value-chain when it comes to food subsidy where ration shop owners sell grains in the open market and make fraudulent entries for this in their books. A way out is to tax the product which is presently also being done in some States through a mandi tax or something else. This tax will be finally passed on to the consumer who will then have to pay a higher price for the product. Such a move will ensure that the tax does not come in the way of the farmer&rsquo;s income. Strictly speaking this would be an indirect tax on commodities, like an excise or sales tax, which will get subsumed under GST. The income of the farmer will still be outside the ambit of income tax.<br /><br />Please <a href="http://www.thehindubusinessline.com/opinion/india-should-tax-agriculture/article9677312.ece" title="http://www.thehindubusinessline.com/opinion/india-should-tax-agriculture/article9677312.ece">click here</a> to read more. <br /></div>                                                           
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    <br><a href="http://www.thehindubusinessline.com/opinion/india-should-tax-agriculture/article9677312.ece" class="re" target="_blank">The Hindu Business Line, 2 May, 2017, http://www.thehindubusinessline.com/opinion/india-should-tax-agriculture/article9677312.ece</a><div class="clear"></div>
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        LATEST NEWS UPDATES | We should tax agriculture. But how? -Madan Sabnavis    </title>
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-The Hindu Business Line

While the idea is reasonable, the issue is so political that it will automatically ring in negative points for the implementer

The subject of taxation on farm income has once again taken centre stage not just because there..."/>
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-The Hindu Business Line

While the idea is reasonable, the issue is so political that it will automatically ring in negative points for the implementer

The subject of taxation on farm income has once again taken centre stage not just because there..." />
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                            <div align="justify">-The Hindu Business Line<br /><br /><em>While the idea is reasonable, the issue is so political that it will automatically ring in negative points for the implementer<br /></em><br />The subject of taxation on farm income has once again taken centre stage not just because there have been some distinguished opinions voiced on this subject but also that this has been recognised as one area where money is channelled to avoid paying taxes. As the focus of the Government is on black money, looking at agriculture for enhanced tax collection appears a logical corollary.<br /><br />The solution is evidently not simple for were it so, it would have been implemented by now. The major challenge is really political as any such tax would be interpreted as affecting the lives of 600-odd million people and can be perceived to be a disaster during elections. Logically one can argue that if we can sift the rich from the poor this can be done. But agriculture has a complex structure.<br /><br /><em>Pretty strong<br /></em><br />The arguments for taxing agriculture are compelling. It is just like any other economic activity: if individuals and companies can be taxed, so should farmers, provided they go beyond the exemption limit. All other reasons put forward for not taxing farmers are more emotion-based given that the majority would be classified as socially and economically deprived. But then, this can hold for other sections too which are being taxed, especially at the lower-income level.<br /><br />This said there are practical issues which have been hard to surmount so far. To begin with it must be realised that even if agriculture has to be taxed, it would be by the State as our federal structure would not permit the Centre to do so. The major problem is identifying the individuals given that many of them own small pieces of land or are landless labourers.<br /><br />The numbers involved are really large, some 600 million people. The latest data on tax collections shows that of the 42 million-odd people in the organised sector around 17 million are salaried and pay taxes. In the unorganised sector which has 56 million workers, another 18 million pay taxes. Hence, the strike rate for a population of 100 million workers is just 35 per cent. In the case of agriculture with 120 million potential assessees, it will be hard to identify them.<br /><br /><em>Tax what?<br /></em><br />The other issue is what can be taxed? Should it be value of output or the net income earned by farmers? While the value of output sold can be gauged and tracked to the extent that it enters the market, this is not net income as there are expenses incurred in growing crops which include seeds, fertilisers, water, and so on. Also for those owning equipment a depreciation value has to be imputed. This means farmers have to be treated on a par with companies or self-employed professionals and not income tax assessees. How can one draw up such a profit and loss account?<br /><br />Further, there is a lot of produce that does not enter the market and the marketable surplus can range from anywhere between 65 to 100 per cent depending on whether it is a food crop or a commercial product such as cotton and jute. Hence, a large part of the value will be hard to fathom on this score. Also there is a lot of under-reporting given the state of logistics in the country.<br /><br />There is hence an anomalous situation where there could be a considerable amount of money that is channelled here to escape tax by diverting funds to agriculture on paper or showing property owned as farmland which may be used for a penthouse. This is what needs to be plugged. To begin with this is what should be targeted by the department to weed out such leakages. This is akin to the amount siphoned out by the value-chain when it comes to food subsidy where ration shop owners sell grains in the open market and make fraudulent entries for this in their books. A way out is to tax the product which is presently also being done in some States through a mandi tax or something else. This tax will be finally passed on to the consumer who will then have to pay a higher price for the product. Such a move will ensure that the tax does not come in the way of the farmer&rsquo;s income. Strictly speaking this would be an indirect tax on commodities, like an excise or sales tax, which will get subsumed under GST. The income of the farmer will still be outside the ambit of income tax.<br /><br />Please <a href="http://www.thehindubusinessline.com/opinion/india-should-tax-agriculture/article9677312.ece" title="http://www.thehindubusinessline.com/opinion/india-should-tax-agriculture/article9677312.ece">click here</a> to read more. <br /></div>                                                           
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    <br><a href="http://www.thehindubusinessline.com/opinion/india-should-tax-agriculture/article9677312.ece" class="re" target="_blank">The Hindu Business Line, 2 May, 2017, http://www.thehindubusinessline.com/opinion/india-should-tax-agriculture/article9677312.ece</a><div class="clear"></div>
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Home हिन्दी

We should tax agriculture. But how? -Madan Sabnavis

Published on May 4, 2017   Modified on May 4, 2017

-The Hindu Business Line While the idea is reasonable, the issue is so political that it will automatically ring in negative points for the implementer The subject of taxation on farm income has once again taken centre stage not just because there have been some distinguished opinions voiced on this subject but also that this has been recognised as one area where money is channelled to avoid paying taxes. As the focus of the Government is on black money, looking at agriculture for enhanced tax collection appears a logical corollary. The solution is evidently not simple for were it so, it would have been implemented by now. The major challenge is really political as any such tax would be interpreted as affecting the lives of 600-odd million people and can be perceived to be a disaster during elections. Logically one can argue that if we can sift the rich from the poor this can be done. But agriculture has a complex structure. Pretty strong The arguments for taxing agriculture are compelling. It is just like any other economic activity: if individuals and companies can be taxed, so should farmers, provided they go beyond the exemption limit. All other reasons put forward for not taxing farmers are more emotion-based given that the majority would be classified as socially and economically deprived. But then, this can hold for other sections too which are being taxed, especially at the lower-income level. This said there are practical issues which have been hard to surmount so far. To begin with it must be realised that even if agriculture has to be taxed, it would be by the State as our federal structure would not permit the Centre to do so. The major problem is identifying the individuals given that many of them own small pieces of land or are landless labourers. The numbers involved are really large, some 600 million people. The latest data on tax collections shows that of the 42 million-odd people in the organised sector around 17 million are salaried and pay taxes. In the unorganised sector which has 56 million workers, another 18 million pay taxes. Hence, the strike rate for a population of 100 million workers is just 35 per cent. In the case of agriculture with 120 million potential assessees, it will be hard to identify them. Tax what? The other issue is what can be taxed? Should it be value of output or the net income earned by farmers? While the value of output sold can be gauged and tracked to the extent that it enters the market, this is not net income as there are expenses incurred in growing crops which include seeds, fertilisers, water, and so on. Also for those owning equipment a depreciation value has to be imputed. This means farmers have to be treated on a par with companies or self-employed professionals and not income tax assessees. How can one draw up such a profit and loss account? Further, there is a lot of produce that does not enter the market and the marketable surplus can range from anywhere between 65 to 100 per cent depending on whether it is a food crop or a commercial product such as cotton and jute. Hence, a large part of the value will be hard to fathom on this score. Also there is a lot of under-reporting given the state of logistics in the country. There is hence an anomalous situation where there could be a considerable amount of money that is channelled here to escape tax by diverting funds to agriculture on paper or showing property owned as farmland which may be used for a penthouse. This is what needs to be plugged. To begin with this is what should be targeted by the department to weed out such leakages. This is akin to the amount siphoned out by the value-chain when it comes to food subsidy where ration shop owners sell grains in the open market and make fraudulent entries for this in their books. A way out is to tax the product which is presently also being done in some States through a mandi tax or something else. This tax will be finally passed on to the consumer who will then have to pay a higher price for the product. Such a move will ensure that the tax does not come in the way of the farmer’s income. Strictly speaking this would be an indirect tax on commodities, like an excise or sales tax, which will get subsumed under GST. The income of the farmer will still be outside the ambit of income tax. Please click here to read more.

The Hindu Business Line, 2 May, 2017, http://www.thehindubusinessline.com/opinion/india-should-tax-agriculture/article9677312.ece

Tagged with: tax buoyancy tax collection Tax Exemption Tax Revenue Agriculture farming Taxation

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