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From 50 Years Ago: Equity in Tax Collection

Vol III, No 6 FebrUARY 10, 1968

Equity in Tax Collection

It was evident at the time of the last budget that assembly-line techniques might find use in a new sphere, tax administration. Morarji Desai announced then that he proposed to introduce division of labour in tax collection — letting notices be issued by subordinate staff, leaving higher staff to concentrate on actual assessment. This was followed by the ostentatious introduction of a Honeywell computer for tax assessment and collection. More recently, a working group of the Administrative Reform Commission has recommended that tax collection effort should be concentrated on high income assessees. And certainly, the vast amount of outstanding under direct taxes, equal to more than a year’s collection, support the case for concentrating the limited tax machinery on cases yielding maximum advantage.

Perhaps the restricted press summaries do not bring out all the findings of the working group, but there is a clear need to focus attention on some other areas of tax collection too. For instance, how many shopkeepers are required to pay tax today? Is it possible to believe, as tax data would have one believe, that only a few of them make profits of over Rs 300 per month which is the minimum exemption limit for individuals? Most shopkeepers and restaurants do not give vouchers for sales made by them and their purchase costs are often self-determined for the records. Again, are all people, registered as shareholders on companies’ registers, taxed? These are two obvious groups to whom the tax administration needs to spread its net. Present laxity favours these groups to the disadvantage of contractual income earners.

Updated On : 9th Feb, 2018

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