THIRUVANANTHAPURAM: The latest bout of tax increases has demonstrated that the state government prefers to burden the tax-paying public rather than punish the defaulters. The government has hoodwinked the Assembly and imposed new taxes to raise over Rs 2,000 crore when it could have easily mopped up at least five times the amount had it shown the political will to collect unpaid taxes from a set of people who had used their political and bureaucratic connections to stall payment.
Official data shows that Rs 32,527 crore of tax amount has not been realised over the years. Of this, only Rs 9,500 crore is entangled in legal disputes. This means that the remaining Rs 23,037 crore is unencumbered. “The collection of the unrealised tax amount did come up for serious discussion but senior officials felt that such a move would not get political approval. There was a feeling that we could have easily collected at least 40 per cent of the amount,” a top department source said.
More than 95 per cent of the unrealised tax amount (Rs 32,156 crore) comes under the taxes on commodities and services, which include sales tax, excise duties, vehicle tax and electricity duties. Sales tax non-payment alone is Rs15,277 crore. “Leakage of such proportions happens mainly because of the unholy trader-politician-bureaucrat nexus,” the department source said. “Politicians and tax officials demand a cut to exempt traders from the payment of tax. Most of the election funds are raised this way,” the source said.
This is also why the department was reluctant to go for a trader registration drive this time. As of now, there are nearly 1.80 lakh registered dealers in the state. However, official data shows that there are 20 lakh unregistered units. “These units extract the sales tax from the public, but do not have to pay even a single paisa to the exchequer,” Dr Mary George, member of the expenditure review panel, said.
