One of the things that struck me in the Budget was the change in the Fringe Benefit Tax. The onus of paying it now rests on employees, not the company.

My question is this: should our babus and netas also be liable to pay FBT on the lavish bungalows, cars, chauffeurs etc. that are used not only by themselves but their families, too? In the earlier regime it may not have made great sense for governments to pay taxes to themselves, but now the incidence of the tax is on the individual and we ought to make him or her pay. I know that babus and netas have been exempt from FBT in previous years but isn't it time we reviewed it?

One of the first things I did this morning was send an e-mail to my accountant asking him if that could be the case. The answer was an emphatic no, and hardly unexpected. We have known for long that our leaders get away with all tax benefits while the common man is heavily taxed.

In many countries around the world, including the United States, many political leaders are mandated to declare private use of public perks. For example, the mayor of New York has to disclose how many miles on his car were spent on personal use, and pay for it.

In our situation, if a minister takes his car, not to mention his entourage, to a party meeting, should that not be considered private use? Should he then not pay for those costs, rather than the public exchequer? Or at the very least, if it is considered a perk, should he not pay FBT?

Let’s also look at the bungalows in Lutyens’ Delhi that many of our babus and netas occupy. On the market, these will fetch rents that will likely be several times the modest salaries of their occupants. So much so, they may be hard-pressed to afford the taxes that may be due on their perks. It just isn’t fair but what can we do?

It might not seem simple to figure out how to separate public and private use of the perks and tax the babus and netas. But then, it is not so complicated either. It just needs a little application. What is far more difficult is to convince the political class that it needs to pay taxes on the perks they enjoy. But who is going to include it in the agenda of tax reform?