government department is on a digital drive. Many of them ask for the same
information from a taxpayer to serve their individual needs. Many a times,
administrators seem to believe that good intentions can justify bad
implementation. Recent changes in ITR software is a case in point which was
justified by the CBDT as if 11th July was the most auspicious time
for tweaking the utility for a 31st July deadline! Such times make a
taxpayer and tax filer feel helpless and insignificant.
There is a
consistent and ceaseless endeavour on the part of the tax department to make
changes and tinker with ITRs and schema despite court orders against doing so.
Add to that changes in ITR itself – say, asking for directorship details.
Aren’t they available with MCA? Isn’t MCA part of the same government? Cannot a
Director based on PAN be matched with the tax data and serve the purpose of the
tax department? The talk of ease of doing business doesn’t seem consistent with
such actions. Many such actions send a message to the entrepreneur that there
are strong forces preventing him in his flight to success. To the habituated
and compliant taxpayer, it signals lack of care and respect by the authorities.
fairness can a taxpayer ask – what do I get in return for my taxes? Taxes are
not a consideration, yet taxes are paid for a reason and ease of compliance and
clear outcome is the least a taxpayer can expect. The collector of taxes and
those who decide on spending them have an obligation directly towards a
taxpayer. Taxes are not a charge on taxpayer’s industriousness and patience.
Most middle class pays 20-30 per cent of earnings as direct taxes. Firms and
individuals have a surcharge (a sneaky and shaky way to collect more). On
dividend government taxes a risk-taking investor three times on his potential
gain – at company level, at dividend distribution level and then 10% if the
investor receives a sum greater than Rs. 10 lakhs. And if he wants to sell the
shares at profit he can do so up to Rs. 1 lakh without tax. And of course you
are not spared at the time of spending, with GST of 18%. Seems like the
taxpayer works, spends, invests and saves to pay taxes!
What is the
obligation of the collector of taxes towards a taxpayer? Government is under a
social contract to spend taxes well and for the benefit of the taxpayers too
and not just for its vote banks. One wonders how taxpayers feel about their tax
monies being spent and whether that spending has something in it for them, at least
in respect of a fair, just and timely tax administration.
many feel that their taxes don’t yield a bang for the buck. Someone said
that my taxes actually work against me, they end up as reservations in
education and work against my own children’s future. A taxpayer is not able to
perceive a clear and direct nexus between taxes paid and benefits received. Tax
payment is a service to the nation and the nation above all owes to the
taxpayer some service, too. Does a taxpayer receive a reasonable medicare? Or
dependable infrastructure? Or emergency services? Or access to a timely,
corruption-free and fair justice system? For many facilities the taxpayer pays
directly. Say airport charges or tolls or road tax. Add to that the taxpayer
money which covers up tax-free incomes of wealthy kisans who take even
say several crores of income tax free. Let’s not talk about mismanaged funds
like the NPAs of banks – an inefficiency or even mismanagement funded by taxpayer
pre-Independence mindset is deep-rooted with a very damaging perspective on
taxes. India is yet to develop its own taxation philosophy. The old and
imported socialist mindset looks at taxes as a wealth-distribution mechanism.
However, that is primitive, negative and a secondary approach which has failed.
The rich have found places to hide income and pay little taxes. And the
middle-income people get squashed and hustled. It is time that tax
administrators introspect more on questions such as these – how do I make a
taxpayer see her taxes as an investment which yields direct returns? What can
the government do to make the entire process feel smooth and easy? What will
make a taxpayer see her taxes as an investment in nation-building but also as a
contribution towards building her own future?