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Markets will remain closed on 19th & 20th October 2017.
We wish all our readers a very Happy Diwali!

Do you subsidise tax evaders?
Fri, 11 Jun Pre-Open

You may be paying your taxes promptly and conscientiously. You may not even be particularly friendly with any tax evaders who go to any measure to evade taxes. But nonetheless, you end up subsidising their lifestyle in this country. How?

It's quite simple, actually. We all pay taxes to the government to run the economy and provide us with basic public services that all citizens of the country get to enjoy equally. If that's the case, it's only logical that all citizens should be paying taxes in the same proportion. However, tax evaders don't. Thus what ends up happening is that you as an honest and full fledged tax payer end up subsidising the tax evader's consumption of public services by paying a higher rate of taxes on your income then he does.

Thus it will come as some good news to you to know that Finance minister Pranab Mukherjee recently made his intentions in this direction clearer. And he seems quite determined this time around. He has asked income-tax officials to look beyond the Rs 4,300 bn tax collection target for the current financial year. He will seek to do this by two means.

One, the government would gradually phase out tax exemptions and widen and deepen the tax base. This would include monitoring the booming sectors of the economy for tax compliance.

Second, he intends to aggressively work on carrying out assessments and investigations and develop intelligence data to deter habitual tax evaders. Further, the government is in the process of setting up 8 more IT overseas units. This will include in the US, the UK, the Netherlands, Cyprus, Germany, France and UAE. The government already has one such unit in both Singapore and Mauritius.

All this with the intention of facilitating better exchange of tax information. The seamless flow of tax-related information from foreign tax jurisdictions and cross-border transactions is the need of the hour. All these efforts will go towards combating tax evasion strategies such as the development of tax shelter products and the use of tax havens.

The Finance Minister seems quite eager with regards to this issue. We hope these efforts yield better results this time around. After all, no one likes tax evaders. Or worse still, no one wants to subsidise tax evaders. Yet, we all end up doing so.

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