Should you get ready for a lockdown tax ?
Tax
The protracted war against the corona virus is affecting government coffers, leading to states wanting to raise taxes as much as possible in an effort to offset some deficits.
Sealed borders
With each state’s borders sealed, the risks of smuggling have been ruled out, leaving the states free to drastically raise taxes.
Back to back hikes
For example, one day after the 25% hike in the state of Andhra Pradesh, the price of liquor was increased by another 50%. The new hike is expected to add an additional revenue of Rs 9,000 crore per year.
Fuel
As oil prices continue to decline around the world, governments have decided to raise fuel prices at a lower cost; For example, petrol in Delhi rose by Rs 1.67 per liter and diesel by Rs 7.10 per liter.
Other options
There are other hikes available to governments – entertainment tax, municipal tax and registration fees on local panchayat chess, cars and property – that can be enforced at any time.