Govts imposing taxes in times of distress 'cruel' : Chidambaram

Governments must borrow to meet ir deficits and t impose higher tax burdens when ecomic activity has ground to a halt amid coronavirus pandemic, senior Congress leader P Chidambaram said on Wednesday after Centre and Delhi government hiked taxes on petroleum products.

New or higher taxes are justified only when ecomy is booming, former Finance Minister said, dubbing imposition of taxes as "cruel". Tax burdens on middle class and poor are actually taxing distress, he said in a series of tweets.

"Governments should give money to people in times of distress, t squeeze and take money from people," Chidambaram said.

"We have been pleading for cash transfers from government to bottom half of people/families. Instead, governments are doing a reverse transfer of money from people to government! Cruel," he said. New or higher taxes will impoverish families furr, Chidambaram asserted.

"Governments must borrow to meet ir deficits, t impose higher tax burdens when ecomic activity has ground to a halt," he said.

Chidambaram's remarks come after central government on Tuesday night hiked excise duty on petrol by a steep Rs 10 per litre and that on diesel by Rs 13 a litre. Retail prices of petrol and diesel will t be impacted by tax changes as state-owned oil firms will adjust m against recent fall in oil prices, industry officials said.

Petrol prices in national capital were hiked by Rs 1.67 a litre and diesel by a steep Rs 7.10 per litre after Delhi government raised local sales tax or value-added tax (VAT) on two fuels.

Petrol in Delhi w costs Rs 71.26 a litre as against Rs 69.59 previously, oil industry sources said. Diesel price has been hiked to Rs 69.39 per litre from Rs 62.29.

Struggling with low revenues during lockdown, several states have also hiked taxes on alcohol