Friday, October 28, 2005

Are you ready to pay tax?

In response to http://www.financialexpress.com/latest_full_story.php?content_id=107039&pn=1

Its queer to know that just about 3% of our 100 billion plus population pay taxes, and collection rate is just about 10% of GDP. But what gives the people the audacity to avoid paying taxes? Looking at it objectively, I can think of

  • Inefficient tracking system
  • Corrupt officials
  • Slow judicial system
  • Law loopholes
  • Lack of faith in the politicians running the government
  • Demotivating to find 97% of the population not paying tax

The government's plan to send sms's is a novel idea to exploit technology; it was quite effectively done during the july 26 rains, when messages from the police commissioner were circulated to all mobile users in Mumbai. But I don't see how an individual can hold his head high by paying taxes. With the kind of collection system in place, there is hardly anyone who cares if his neighbour and his uncle are paying taxes or not. All they know is what they hold in possession.

Our agrarian economy does not allow us to collect taxes from the farmers. Unfortunately, there are those who end up making mansions with the agricultural produce, without paying taxes. A majority of our transactions take place by cash, thereby blurring any kind of tracking system.

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