Taxing times

6 May 2020 By Una Galani Follow @ugalani

Governments worldwide are handing out cash to prop up demand as lockdowns crush revenue. New Delhi, however, is raising taxes to contain deficits, upping levies on petrol as states slap charges on booze. India’s fiscal anxiety is acute, but others may follow after the crisis.

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India on May 5 increased taxes and duties on petrol and diesel instead of passing on the benefit of lower global crude oil prices to consumers. Taxes and duties were increased by 10 rupees per litre and 13 rupees per litre respectively. The federal government said that local pump prices would not be affected.

On the same day, the Delhi state government said it would impose a special 70% tax on retail liquor purchases after large crowds gathered at stores as a six-week nationwide lockdown eased. Other states such as Andhra Pradesh also hiked levies.

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