RS returns Finance and Appropriation Bills

New Delhi, May 4 (UNI) The Rajya Sabha today returned the Finance Bill, 2007 and Appropriation (No.2) Bill, 2007 to the Lok Sabha.

In his reply to the more than three hour debate in the upper House on the two Bills, Finance Minister P Chidambaram said the UPA government has achieved major tax reforms like abolition of customs duty.

He said there has been a slew of changes which included the introduction VAT in nearly all the states, phase out of CST and introduction of GST by 2010.

It is for the first time that the tax collection grossed budget estimates. Savings rate has increased to 32.3 per cent in 2005-06 from 29.3 per cent in 2003-04, he said. He expressed optimism that it would increase this year too.

''I am not a high tax Finance Minister. I am only taxing those sectors that are exempted from tax,'' Mr Chidambaram said.

''We are leaving more money in the hands of the citizen,'' he added.

Mr Chidambaram pointed out that there was an investment boom happening in the country. He said taxes were not going higher but there was a more efficient and better policy framework in place.

Corporates, he said, should pay at least 33 per cent in taxes from the current 19 per cent. ''The intention of the government is to make the corporate sector pay(taxes),'' he said.

He said the proportion of corporate tax is only four per cent to the overall contribution.

The Minister said the overall demand for expenditure from the different sectors is rising. The plan expenditure has increased from 1,22,280 crores to Rs 2,100,00 crores.

''Virtually every sector has doubled their expenditure,'' he said citing an example from defence, which has gone up from 6,53,000 crores to 9,50,000 crores.

Mr Chidamabram said by the end of Monsoon session he would introduce a income tax code.

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