An Indian laborer push a tricycle laden with consumer goods towards a wholesale shop in Hyderabad on Aug. 3. The Indian government has a new national sales tax that will replace a patchwork of central and state levies on goods and services. (Photo by AFP)
Church officials have expressed concern over India passing a new law to unify its tax system, saying they want it to be implemented without burdening the millions of poor in the county.
"Most reforms consider the rich and mostly are in their favor. The needs and concerns of the poor are not considered. That is the concern," said Bishop Theodore Mascarenhas, secretary-general of the Catholic Bishops' Conference of India.
The Upper House of Indian Parliament on Aug. 3 passed the Goods and Services Tax Bill after political parties and state governments agreed on its terms in wide discussions and debates in parliament and outside for over eight years.
The law, which aims to implement a comprehensive tax on goods and services, replaces separate taxes levied by the federal and state governments. The law facilitates a single common national market and needed a constitutional amendment to pass in parliament.
Bishop Mascarenhas told ucanews.com that church leaders are concerned as to "what taxes will continue and what will merge" after the bill is implemented.
Experts in the government claim the new bill will make commodities cheaper but "we don't believe that unless we see it on the ground level" the bishop said.
"We don't believe in any political party as far as public money is concerned," he said adding, "our main concern is that the poor may not suffer" because of this bill.
Archbishop Anil Couto of Delhi said in a statement he is "seriously concerned about its implementation and its consequences on the poor sections of the society."
Media discussions say the bill will help industry and exports besides helping the government widen its tax network and simplify the tax payment process and documentation.
Government data shows only 1 percent of India's 1.2 billion people pay income tax to the government, while everyone including the poorest, who buy essential commodities, are paying tax some times up to 20 percent.
Experts agree that while a unified tax is a common phenomenon in most developed countries, they are unsure how it will play out in the market of India, where 180 million people live in poverty, not having even one full meal a day.
Archbishop Couto said he wants the "government not to burden the poor with additional taxes and to work out strategies and policies to make essential commodities affordable to the poor."
Jesuit Father Denzil Fernandes, executive director of Indian Social Institute said "the impact of the bill will be more on the poor than the rich because commodities that are cheap for the rich, is not what poor buy."
He said that bill is said to make products like automobile and restaurant food cheaper, which are not the concern of the poor. Hence "the bill is more pro-rich than the poor," he said.
The bill has to pass a few more steps to become a law. It must be passed in the Lower House and then must be ratified by more than half of the 29 states in the country. When that is done, it has to be signed by the Indian president to become law.
However, these steps are seen as mere formalities as the critical issues such as tax rates have already been debated and agreed upon.
