Question 1 · 10 marks · 166 words written
Opening · a definition
Windfall tax is imposed on a company where it makes huge profit not because of expansion of company's output but because of prevailing international scenario which led company to get much gain.
Ex → Petroleum companies were charged windfall tax because of international high price of petro-products due to Russian-Ukraine war.
Body · points
Windfall tax :- Promoter of equality
Progressive taxation :- as it is charged on rich and hence revenue can be used to serve needy & poor.
Socialism:- As per Oxfam:- Top 1% Indians own 22% resoures, hence such taxation would fill the wide gap by taxing rich.
However, they are not sole solution
Government by charging windfall taxes is not using them on social security schemes but for capital expenditure.
Poor is not given any tax concession on buying the same thing Leading to burden of windfall tax on poor due to more cost price.
Close · a summary
Windfall tax, during Ukraine-Russia war was a necessary evil to ensure India's socialistic principles of development.