Friday, July 24, 2009
Unburdening the Indian Tax Payer - I
Even after over six decades of our independence none of our finance ministers, known to be financial wizards have been able to simplify the system of taxation in India. The result of defective system is now so visible in the country that we have developed a black economy perhaps unparalleled in any country in the world. The ill-effects of the system have been of such enormous proportions that we have become a country of scamsters from top to the lowermost rungs of our leadership and bureaucracy. They have often been shamelessly exposed in front of their countrymen without any positive results. To be precise our totally anti-people, harsh and complicated system of taxation over a very narrow base has proved undoing of our otherwise flourishing economy.
I would appeal to our worthy finance ministers past and present to ponder, whether they have really done any justice to the honest and non-tax evading citizens of this culturally rich nation, in the last sixty two years, since independence? At least my reply to this is - not at all. Most of the ruling governments whether Congress or any other, have so taxed the citizens in the name of earning revenue for developmental works in the country, that they have practically demotivated them to pay the imposed taxes honestly and sincerely. The worst part is that even development of the country has lagged far behind the specified targets. Thanks to our unscruplous politicians wearing the garb of the government/ministers.
The taxation rates in the past have been so high, (as high as even 40% to 50% of the taxable income) that only unpractical people with misconceptions could hope to derive cent percent compliance from taxpayers, and perhaps those who are self defeated would themselves and on their own, part with such a large proportion of their hard earned income. On top of all that our highly corrupt political system has been the biggest culprit in adding fuel to the fire and accumulation of black money may be to the tune of Rs 50,00,000 to 100,00,000 crores, which perhaps exceeds our annual national budget. Almost a parallel running black economy. Indian wealth stashed away in foreign banks is said to be much more than, of all other countries put together is a proof enough of our inapt system. Getting that wealth back could be an assignment too far fetched at least as it appears at present. What an achievement indeed!
It would be difficult to swallow the fact that even our IT department has played its role honestly to ameliorate the sufferings of this ever so poor country which inspite of having been called “Sone ki chidiya” in the good old days, has posed to be one of the poorest countries in the world till recently. Is there really a way out of this mess created by our so called dynamic but scams prone leaders? All our Finance Ministers in collusion with their respective Prime Ministers and the cabinet colleagues have hardly thought of any way other than thrusting the country’s tax payers with a heavy and unjust dose of taxation from year to year, besides of course total mismanagement of petroleum products whose rates probably are amongst the highest in the world and highly conducive to increasing cost of daily needs of citizens.
As a result of this, tax compliance has been far from satisfactory, except perhaps by a few million odd salaried classes of tax payers, who hardly have any opportunity and scope for evading Income Tax, and encouraging the rest of the crores and crores of people to become non tax payers or tax evaders. Presuming that there is no way out from this malady is like rejecting the analogy of Napoleon the Great, that the word impossible is found only in the dictionary of fools.
To be continued - Please See Part-II