"1. An environment of voluntary tax compliance has to be fostered and nurtured in the country.
2. There was also need for putting in place measures, through laws and procedures, to ensure that recalcitrant tax evaders are brought to book.
3. That interface with compliant taxpayers, especially small taxpayers, senior citizens and pensioners must be initiated and maintained on a continuous basis, for a feedback on difficulties being faced by them.
4. The improvement of basic infrastructure in offices, especially where taxpayer services are rendered, should be looked into, in order that a visit to the tax office is a pleasant experience.”
We, the tax payers, too congratulate the Indian Income Tax Department for a successful completion of 150 years. In fact, the tax payers, too, need to be congratulated for paying Taxes since 150 Years. During these years, tax base, tax litigation, tax procedures and the taxes, all have grown. Needless to say,” Only Taxes have grown without rain.” Apart from Income Tax, many others taxes have born. All the things we use and consume are now taxable except for the air we breathe is still taxfree. However,“ I am thankful for the taxes I pay because it means that I'm employed”.
Madam President has urged for simple, voluntary tax scheme. But Madamaji the fact is SAHAJ and SUGAM are not so SARAL, TDS is TEDIOUS, CPC cannot see, Excise is a big central EXCERCISE, provision of VAT are VULNERABLE ADDITIONS to Tax. We give/ receive Cheques/DD’s to our customers/supplier but have to pay tax only by NETbanking. It is easier to get credit in bank account but difficult to get credit in 26AS account. Now a days negotiation for goods or services on terms of cost and quality is second priority, getting PAN is first priority for business. TAX is a three letter word but thousands of pages are running for its compliance. “Today, it takes more brains and effort to make out the income-tax form than it does to make the income. - Alfred E. Neuman ".
Our Tax Laws should be in a simpler form that can be understood by everyone since taxes affect everyone. Our Taxation Laws are difficult and cumbersome, can be interpreted in many ways thereby leading to confusion. “All the Congress, all the accountants and tax lawyers, all the judges, and a convention of wizards all cannot tell for sure what the income tax law says”. - Walter B. Wriston. This gives rise to litigation. In revenue matters more than 70 per cent of litigation is on account of revenue appeals. Litigation has its foundation in the Assessment stage. Assessments are made in a casual and prejudiced manner. Provisions of Law are not properly appreciated. Judgements of the Higher courts on similar and settled issues are not observed by the Assessing Officer. Half of litigation would not have been born had the Officer followed the Law of precedent. The AO gets a time span of 21 months to make an Assessment of Income for one financial year. Except for issue of notice u/s 143(2), hardly any assessment proceedings begin in the first 6-8 months. The proceedings begin at the eleventh hour and continue up to the last minute of the due date. In these rush of deadlines, Sufficient opportunities to the assessee, proper appreciation of facts and figures, proper application of the provisions of law are missed out. The task of a AO is over by making unwarranted additions to the Income. However, If the assessee is aggrieved by the additions, he may file an appeal with an investment of another eight to ten years. In this current fast moving e- age, our current tax system takes a longer period of 8 to 10 years to get finality to the assessment of one financial year.
Madam President has urged for interface with compliant taxpayers, especially small taxpayers, senior citizens and pensioners must be initiated and maintained on a continuous basis, for a feedback on difficulties being faced by them. I strongly promote the idea that every taxpayer, irrespective of amount of tax paid whether 500, 500000 or 50 Crores, all of them have a right to be heard. A tax payer has parted with his money in the form of taxes. The Taxpayer’s money, irrespective of the amount, is introduced in the economy of the country, he deserves for an honour. But the fact is the Tax collector is the SAHAB and the tax payer is-------. It is the duty of the taxpayer to timely respond to all notices, Orders, tax demands, queries of the tax collector else he is subject to various fines in the form of Interest and penalties. But how many times has the tax collector timely and positively responded to the various grievances of the tax payer, among the many are delayed or non receipt of refunds, non receipt of acknowledgement of ITRV, mismatching of claims, allowances, tax payments, claims in the return but not allowed in the intimation of CPC, pending rectification, release of seized material, Approval of Form 13, Correction of errors in TDS payment and challans, and many more.
Madam President, has urged for infrastructure in tax offices so that visiting a tax office is a pleasant experience. INFRASTRUCTURE is a big word, a far away dream, the Tax payer is not even privileged to basic Sitting room, clean drinking water, a cup of tea and the least one, a wash room in the Tax Office.
We always trust persons who tend to be careful, cautious while handing our money. We have satisfaction if the money given to them has been properly utilized for the purpose given to them. For years, we are paying taxes with an understanding that taxes are necessary for the Growth of Nation, that our money will be rightly injected for Infrastructure, Security, Technology, Education, upliftment of the poor. “The payment of taxes gives a right to protection.” - James M. Wayne. However we are witnessing train accidents, terrorist attacks, inflation, skyscrapers and slums have equally risen, people have to go on strikes to maintain their jobs. We cannot be expected to show resilience over these issues and overwhelmingly continue to pay our taxes. It is disgusting for the taxpayer to know that his money has been mis-utilised for personal gains of few. Scams such as Adarsh Housing Society, CWG, 2G Spectrum, Satyam, Parking of politician’s funds in Swiss Bank accounts, tend to bring resentment to tax compliance.
At every short intervals, the provisions of tax laws are given topsy-turvy ride, tax law are tightened to cover the loopholes which may lead tax evasion. Where strict observance of tax laws is a priority, it is equally important that tax laws should motivate every person to be tax compliant. We usually observe mad rush in the malls where products are tagged with “Buy 3, get One Free” or “ Rs.500 Gift Voucher on every purchase of Rs.5000 and more.” “50% off”. We are invited to make purchases from these shops in such a pleasant manner that we readily surrender and are motivated to buy an article even when we know that the article is expensive. There must be motivation for tax payments too. Where prosecution for tax evaders is a must, Incentives and benefits should be given to tax abiders too. Imagine a scenario where we have paid tax payment of Rs.500,000 and above and we get tax credit of Rs.5000 to be utilized for next year’s payment. Won’t the scheme of such an incentive rise our spirits and we can happily part with our money for payment of taxes? I may sound irrational and out of place to advocate principles of marketing for tax collection, but I am in collusion with the “AAM AADMI”.
There must awareness among the masses about the benefits of payment of taxes. In this world of give and take principles, most people won’t mind in paying reasonable taxes if they are made to realize the nexus between what they are paying and what would they get in return. One must understand that if one has parted with his money for taxes, that in return, apart from peace of mind, he has contributed to Nation’s Growth. Tax Evasion may save money for today but will not reap any fruits for tomorrow. Tax evasion by a few sections of society burdens the honest tax payers. Only three Percent of our population file Income Tax returns as against 45 per cent of Population of USA file Income Tax returns. Hence our tax rates are as high as 30% Income tax, 10% Excise Duty, 4% VAT (apart from the Service tax, Wealth Tax, Profession tax…). There is need to widen the tax base not the rates of tax. Rates of taxes should be reasonable and affordable to all as advocated by Ved Vyas in his famous epic Mahabharat said thus: "State Tax be such which should not prove to be a burden on the subject; the King should behave like those bees which collect honey without causing harm to the tree." Even the Doctor prescribes the small doses little by little to heal a big disease. If the masses are prompt in paying taxes and tax collector is honest in collection and utilization, these rates of taxes can certainly be as low as 10 % Income Tax, 5 % Excise Duty, 1%VAT.
Before Omega, I, a Taxpayer appeal for :-
1. Simplicity in Tax Laws and Easy Compliance of Tax Provisions.
2. Finality to Assessment of Income within short and Fixed period.
3. Rules for Observance of Taxpayers complaints and feedback on Tax compliance procedures should be initiated.
4. Right End Use of Taxes should be morally practiced by the tax collector.
5. Punishment to Tax Evaders but Incentives to Tax Abiders too.