The proposed Income-Tax Business Application that will enable taxmen to widen their net is another attempt to detect evaders and thus boost government revenues. Such attempts have been made earlier, and a committee was formed to identify sectors which generate the most black money, to little effect. But the new data mining tool announced by Central Board or Direct Taxes chief Anita Kapur should give tax sleuths the upper hand in tracing the undeclared financial transactions of individuals and entities.
The government is working on a PAN-based online taxpayer repository that should be fully in place by end-2016. The target to bring in 2.5 million more people into the tax net every month is ambitious by any yardstick, though if there is political will the task should not be daunting. One thing Ms Kapur didn’t mention was how to tackle corruption, that will be the key if this application is to succeed. There is a significant amount of revenue leaks due to this at present, and one of the worst culprits is the income-tax department.
Another major factor is harassment. While one agrees with Ms Kapur that the taxman should not be lenient with tax evaders and that the law should be applied equally to all, there are many cases where people, specially those like small shopkeepers, feel that once they start paying taxes it only means they will face perpetual harassment. It is always the genuine taxpayers and not the big evaders who feel the most harassed as the tax department tries to squeeze as much as it can from them. Perhaps Ms Kapur and the government need to look into this and send a strong message that corruption will not be tolerated.
On the whole, though, Ms Kapur and the government should be commended for their attempt to create this invaluable database of tax-related information and taxable financial transactions that will be available at the click of a mouse. The government and the I-T department will, however, have to think out-of-the-box to get this project going. It will need more than the tax machinery to reach out to millions of the non-tax paying population, that is over two million each month. It is a shameful fact that a bare three per cent of the population pays income-tax now — just over 36 million people — and successive governments have done very little to correct this. It is unfair on genuine taxpayers who often wonder why they should pay taxes when they see so many people all around them go scot-free.
Finance minister Arun Jaitley is hands-on, and between him and Ms Kapur one only hopes they reach their target for the overall health of the economy and the fiscal deficit.
