Aiming to reform and broaden the tax net
Prime Minister Narendra Modi's new five point charter for tax administrators can rightly be called an innovative step in bringing reform to the country's age old and redundant revenue administration, which still has a huge hangover of the British colonial legacy. This charter is uniquely embodied in the word ‘RAPID' which refers to revenue, accountability, probity, information and digitisation. The message conveyed through this new charter is loud and simple: Make the tax system easier and accessible for the tax payers; at the same time, the defaulters must find it difficult to bend the system.
Heralding dynamism to the complex revenue administration through this kind of ‘people-friendly mechanism' can be a great boon for the country as a whole when Modi is trying to bring home ‘less Government, more governance'. The need of the hour is to introduce economic reforms, one being prominently in the revenue sector, both for enhancing respect for the law of the land amongst common citizens and indirectly inching towards lessening the burden of so-called ‘tax payment' deeply ingrained in our ossified edifice of the tax administration.
Addressing a two-day brain storming conference Rajaswa Gyan Sangam, on Thursday, Modi had urged tax administrators to transform into a ‘Karma Sangam'. He asked the senior officials to widen the tax payers from the existing 5.4 crore to 10 crore households. For infusing new blood into the old system, his appeal for changing attitude of the officials towards tax payers is laudable. Today, nearly 42,000 taxmen raise barely eight per cent of the tax. In this age of globalisation and an ever expanding network of information and technology, the revenue department can take one more step for spreading awareness of the benefits of paying tax to the grass root levels.
As the campaign for tax payment now is restricted only to radio, television, newspapers and government departments, it would be much better if it can be extended to the local-self Government institutions like the panchayats across the country. It can indirectly help building a system of new genre tax administration minus the fear factor start from the village level. Instead of strengthening a top down administrative system which is already greying faster for its own checks and balances, the demand for a more responsive, accountable and transparent revenue administration rightly educating the teeming millions and emanating from their backyard would automatically make them abiding tax payers.
Finally, India must demonstrate due respect and resilience to all the law abiding citizens, whether it comes to paying tax or submitting honestly to due process of law. This will gradually weed out the in-built fear of the long arm of law among ordinary people and help broaden the tax net. It is hoped that the idea on how non tax-paying non-agricultural income households could be brought into the tax net should emerge as a credible policy document so that the country can benefit from more tax-paying citizens. Maintaining a cooperative approach towards tax collection can bring the public closer to the system. In fact, it is as good as invoking to bring back the trust of the people on the administrative machinery and reducing the gap between the governor and the governed.