Proposal for life tax hike shot down

The transport department’s hopes were dashed when the chief minister returned its proposal for a steep hike in life tax on vehicles. According to officials, the chief minister asked for fresh proposals after studying the pattern of the tax in other states.

The department had sent the proposal for  increasing the tax on two wheelers and four wheelers a few months ago. It also proposed to impose the tax on auto-rickshaws and tractors to shore up revenues.

As Andhra Pradesh stood second in the collection of motor vehicle tax, the chief minister has been wary of imposing a fresh burden that may trigger protests from opposition parties. A hike from two to seven percent was proposed by the department. The officials said they are formulating new proposals by reducing the precentage points.

They are worried over meeting the revenue target set by the government. The RTA have been asked to collect Rs 3,640 cr this year against Rs 2,920 cr last year.

“We excepted an additional revenue of Rs 200 cr by increasing life tax, but we are not sure now about the total collection,” said an RTA official.