Humourous Thought (Thanks Swami for this gem!):
A fine is a tax for doing wrong. A tax is a fine for doing well.
We, the Indian salaried class, run the country with our Tax-Deducted-at-Source (TDS) + Surcharge + Cess, is well-known. Ofcourse, there are the Ambanis, Mallya, Birlas & even Shah Rukh Khan & Akshay Kumar, who’re some of the top tax payers of the country. But then its us who pay a relatively high tax as compared to the business class.
During a discussion with my friend KV (K. Venkatesh – I’m sure most of you know him) on this subject last year, he’d pointed out that as compared to a relatively secure job & confirmed salary at the end of the month (yeah, the IT Dept. thinks so!), the businessmen carry a relatively large business risk of the business not doing well and their investments going for a toss.
So seemingly all’s fair.
However, I’d like to point out – though I would probably be the lowest earning member of the apartment complex I stay in here at Bangalore, I am probably the highest tax payer amongst them all, if you compare the incomes! Any purchase that the businessmen (no offence meant!) do like a property, a car, or a music system, or books, CD, DVDs, or even a computer at home – they claim it all as business expense & even register losses. They even make their wife & children as partners in their businesses and withdraw plump salaries on their behalf. While we, the salaried class, get *limited* rebates that too for home-loans & investments only. Nothing personal here, and I know they all work very hard too, like us.
This is also true for small shop owners like roadside paan-wallas, electricians, etc. I’ve heard stories of paan-wallas who come to their shop in chauffeur driven Toyota Corollas & Honda Civics.
These are also the people who don’t bother about paying a bribe to get their work done at government offices. They have (obviously untaxed!) black money, which they can splurge at the drop of a hat.
So: what does an Indian income tax-payer get, as compared to an income tax-defaulter? NOTHING!
The Indian tax payer doesn’t see any value in paying income tax.
This has been pinching me and I’ve been carrying these few thoughts about how to get some special value-adds for the tax-payers, as detailed below.
This thought may not be 100% in its own – with my relatively limited knowledge of “how things work” here – but I’d like to suggest this and I feel confident that this (or an appropriately modified form!) can help be a boost to the tax collections in the country.
Tax payers in the country should be categorized based on the tax-slabs and/or the annual tax they pay. The National IDs which the government plans to issue to all the citizens can have this added “Tax-payer status”, and/or be differently colored for different categories. This can also (more appropriately) be done at the PAN card level, but with the logistics involved in getting all the currently issued PAN cards updated, it might be a grand exercise. So while the government is at it for the National IDs, why not add a PAN number & tax-payer status to it.
Based on the tax slab and/or annual tax paid categorization there should be various priorities/reservations (or if you want to call them with the fashionable: Quota!) available to tax-payers for various things like a new phone connection, a new gas connection, bus/train/flight reservation, a new water connection, a new electric connection, a court case hearing (even special fast track courts), school & college admissions, and such.
This may sound similar to an “economic condition” based quota system which was proposed by many as against the currently misused caste & religion based quota system.
Benefits, that I think of:
1. The tax payers will see *value* in paying income tax, rather than defaulting on it.
2. More & more currently non-tax payers (or defaulters) will want to come into one of the tax-payer brackets.
3. More people will start declaring their correct income & start paying their income tax due, to climb up the tax-payer category.
When more people start paying tax, I also think more people will start looking forward to & ASK for better facilities and amenities from the government. People will reduce/stop paying bribe for government work – because their black money resources will have reduced. The government collects more money and hopefully pays the government servants much better, and they don’t ask for bribes anymore. (Yeah, & I’m dreaming!)
Anyway, endless thoughts! Need to stop somewhere… But the prime target:
1. Recognize the tax-payers and give them special treatment.
2. That way, get more & more tax-payers
3. And, collect more tax money
Swell idea, or a stupid one? Let me know your thoughts!~