Indian National Green Party


National Policy-Tax

2.1 Principles
The Indian National Green Party’s taxation policies constitute an integral part of economic policies. The Party call for the Indian government to focus on particular principles to guide taxation policies:
a) the need for a fair distribution of national income and wealth;
b) the fact that environmental resources are community resources;
c) the adoption of incentives for sustainable use and penalties for unsustainable use of natural resources;
d) adequate provision of resources for public services;
e) the support of full employment,
f) the double benefit of reducing taxes on labour and increasing taxes on resource use and pollution; and
g) the discouragement of speculation.

2.2 Goals
The Indian National Green Party aim to use taxation as an efficient tool for achieving objectives relating to social equity and environment. This can be carried out either by using tax revenue to finance beneficial reforms or by applying taxation as a steering instrument in itself.
It should be a responsibility of the Government to educate the community about the social benefits of the taxation system and the citizens’ responsibility to contribute through the taxation system.

2.2.1 Taxation as a Revenue Instrument
The Indian National Green Party reject the regressive fiscal policies of the old parties. We see fiscal policy playing a vital role in reconstructing the Indian economy on a socially and environmentally sustainable basis. It is important that the revenue share of Gross Domestic Product (GDP) is raised.
The Indian National Green Party’s fiscal policy aims to raise a sufficient revenue base to:
a) create a sustainable economy with appropriate levels of development in environmentally sound industries;
b) create sustainable communities based on principles of social justice, and ensure equal access to community services such as schools, adequate health care, safe streets and reliable public transport;
c) provide a strong financial basis for effective management of public sector expenditure and debt;
d) provide revenue for a budget that can sustain healthy programme for third world aid and for nature conservation; and
e) provide a platform for ethical capital investment in community amenities and infrastructure.

2.2.2 Taxation as a Steering Instrument
A Green economy implies that taxation be used as a steering instrument in the following ways:
a) ecological taxation for the protection of nature so that our generation can leave a healthy ecological system to future generations. The tax system should encourage environmentally positive behaviour and penalise environmentally destructive behaviour. It should provide incentives for sustainable use of natural resources;
b) progressive taxation as part of a policy for national equity;
c) the burden of taxation should be levied on the consumption of scarce material resources and financial speculation rather than on labour;
d) tax should provide a mechanism to limit foreign debt and foreign speculation; and
e) tax should encourage domestic savings, employment and productive investments.

2.3 Short Term Targets
The Indian National Green Party will support tax increases sufficient to support a strong budget with environmental and social goals.

2.3.1 Personal Income Tax
Marginal tax rates for individual income earners need to be made more progressive. At present, the tax payers on low to middle incomes pay more tax in proportion to their income then people on high incomes having a fairly better knowledge and planning skills for tax savings. This is not favourable for the majority of Indians. The Indian National Green Party recognise that the taxpayers have not been generally responsible for the avoidance of tax which has led to the erosion of India's revenue base.
The Indian National Green Party also believes that the number of tax payers can increase exponentially if proper education regarding paying income tax is provided to all persons having some earning. This includes individuals, business organisations incorporating proprietary, partnership, cooperative, private as well as public limited companies. There should be simple procedures for paying income tax so that anybody can put the right amount of tax in the government's bank accounts for developmental work. People have a fear that if they pay income tax even at the standard slab fixed by the government, they will be harassed by the tax authorities and that they will have to pay more taxes in the long run.

2.3.2 Indirect Taxation Reform
The Indian National Green Party propose a reform to improve the existing sales tax system so as to :
a) incourage more efficient resource use eg. by the reuse of material and equipment;
b) increase the efficiency and transparency with an emphasis on taxes with an ecological component; and
c) make taxation more progressive through higher rates for luxury items;

2.3.2 Eco-taxes
The Indian National Green Party regard ecological tax reform as the key element of a tax reform package.
Eco-taxes seek to incorporate the costs of resource use and disposal into prices to encourage efficient resource use and to reduce pollution. The Indian National Green Party support the introduction of eco-taxes, although we acknowledge the fact that environmental values cannot be reduced rupees and paise alone.
Eco-taxes aim to address :
1. the problem of many resources being consumed at an alarming rate; and
2. the problem of increasing pollution, causing deterioration of air, water and soil.
The Indian National Green Party believe that the application of appropriate tax rates and tax mix will encourage intergenerational equity.
The Indian National Green Party will work to develop a package of levies to provide incentives and penalties for individuals and industry, to encourage the adoption of waste minimising technologies and the production of recycled and recyclable goods. These include:
a) resource levies to be applied to primary commodities including minerals, coal and timber. Those levies should be calculated on volume of resource extracted rather than on profits sometimes generated;
b) levies on the extraction of forest and water resources to reflect their critical environmental values as well as other, including intrinsic, values;
c) pollution levies on the emission of poisonous substances such as sulphur dioxide, nitrogen oxides and heavy metals into the environment;
The Indian National Green Party will also
a) offer tax incentives for the transition to non-polluting processes and technologies;
b) eliminate subsidies and tax exemptions for ecologically damaging activities such as resource consumption and pollution; and
c) ensure that ecotax revenues are used to offset taxes on labour in order to maximise the double dividend obtainable from ecological tax reform and encourage employment and productive investment.

2.3.3 Transport
The Indian National Green Party will:
a) work towards a change of the current indirect tax system for cars and trucks to favour more energy-efficient vehicles;
b) propose changes to the system of fringe benefits taxation so that driving of employer provided vehicles is appropriately and equitably taxed;
c) propose a shift of charges for motor vehicle registration and compulsory third party insurance to a fuel tax, so that car owners only pay in relation to the amount of travelling they do, with compensation to be assessed on the basis of income and place of residence; and
d) maintain excise on fuels but substantially reduce the rebates to the mining and forestry industries.

2.3.4 Energy
The Indian National Green Party will propose changes in the taxation structure in the energy sector to support the aims described in the Energy policy framework.
(a) improve and expand public transport;
(b) develop alternative energy techniques such as solar thermal power, photovoltaics and wind power;
(c) reduce taxes, such as payroll tax; on employment;
(d) compensate low income earners for the regressive impact of the levy.

2.3.5 Agriculture
The Indian National Green Party will propose changes in the taxation structure for chemical fertilisers and pesticides with the aim of supporting a change to ecologically sustainable farming methods.

2.3.6 Urban Planning
The growth of our cities is often haphazard, with negative consequences for people and for the environment. The Indian National Green Party will support:
a) tax incentives for environmentally-sound residential developments; and
b) removal of hidden and explicit incentives for urban sprawl.