On 13th of August 2020, Mr Prime Minister declared a new platform which is meant to ease the process of taxation and reduce tax harassment, which the government was accused of recently when VG Siddhartha Hegde chose to kill himself rather than face the unjust wrath of the tax department. Overtime tax department had become another name of harassment tool for all the entrepreneurs for this nation, they had to run from pillar to post to get small or in many cases, trivial permissions from the tax department, be it alone the GST filing or any other service, forget about the exemptions that are given in tax to small scale industries under the make in India campaign or now The Atmanirbhar Bharat. The cases were well discussed among many intellectuals and there were all types of discussions on various television channels, lest everyone talked about reforms but no one dares to form a policy which would abate all these problems, CCD Giant Mr Hegde was not the first to commit suicide due to unjust actions were taken by Kleptocrats of tax department nor will he be the last one to do so, finally Mr Prime minister took cognizance of this matter and has taken a reasonably good decision to make the whole process faceless and more transparent. But is it all that was necessary? Can this change the attitude that India has been nurturing for decades?
Was VG Siddharth Hegde the first entrepreneur to die of financial causes and tax harassment?
The simple answer would be ao, over the years, there have been multiple instances of entrepreneurs ending their lives to escape the harassment done by the Tax department on them. Let us hold the bull by its horns here. We can’t profess that every tax inspector or tax official is an honest man and epitome of righteousness and other such qualities; there are many wolves in the sheep’s pack, some who have been looting and devising their unrighteous ways to earn Vitamin R (Rish wat). We cannot, of course, say that all of the tax department works that way but we can at least admit it honestly that at least a sizeable percentage of the employees do employ such unscrupulous methods to earn quick cash, whatever the reason is, the newbie business men’s are the one who bears the brunt of these officer’s pompous demands at the end of the day. So, how many entrepreneurs have decided to walk on the path of self-slaughtering?
To mention a few here would be
June 2019: Forty-eight-year-old NRI businessman Sajan Parayil, who started with an Rs15 ($0.22) weekly wage and went on to build an Rs15 crore convention centre of his own, was found hanging on the rafter of the terrace roofing of his house on June 16. He reportedly spent the last six months of his life chasing bureaucrats for an occupancy certificate for the convention centre, but eventually gave up because of all the red tape and repeated harassment.
April 2016: Techie-turned-entrepreneur Lucky Gupta Agarwal ended his life by inhaling nitrogen when his startup, KQingdom It's, began failing. In a two-page suicide letter, Agarwal asked his family to return the nitrogen gas cylinder and collect the Rs5,000 deposit from the shopkeeper.
August 2012: Lalit Sheth, the owner of Raj Travel World, then India’s leading travel service, jumped off the Bandra-Worli Sea Link bridge in central Mumbai. Reports claimed he was battling debt and financial hardships.
And many more such incidents, which are just a burden and lost in the files of Indian systems, many are not even traced, as the businesses were too small to be noted.
Many small businesses were assassinated due to the pompous nature of tax department officials’ unscrupulous demands to pay them and speed up the process.
What steps were taken by the Subsequent government to stop this?
While the problem is not new in Indian, nor is it very new in any other country, what has the Government of India done to tackle this problem over the years?
There were many reforms in tax department to curb this problem in past few years, a white paper by Mr Govinda Rao and Kavita Rao is an excellent analysis on that matter, which in-depth and detail talks about the series of tax reforms taken up by subsequent governments, though it doesn’t talk about the cascading effects of the same in the white paper I suppose the readers are smart enough to contemplate it in their level that every policy had a direct and indirect effect on the lives of an aam aadmi which in turn shaped the behavioural change in them. Some of them were so radical that many a time a commoner would be left with no choice but to hide his revenue and steal taxes from the system, a nd that slowly turned into a habit and the collective herd psychology.
Will the present system in place help make way for new entrepreneurs?
While the speech given by Mr Prime Minister was very inspiring, supporting and encouraging to all the small Micro and Medium enterprises lobby and also the honest Tax paying Aam Aadmi it is very important to have a close look at the details as I have always been advocating the idea of “the Devil lies in the details” and thus we need to have a close look at the details of the policy to understand pros, cons and cascading effects of the policy on the lives of its citizens.
Since till now I couldn’t find any documentation on the transparent tax system, which was declared, we shall just try to analyse it from the speech of Mr Prime Minister.
· Minimum human interference, which means that the officers will have less and less interaction with an actual human, avoiding the possibility of demanding an unjust amount to do their work, which also translates to making the complete process technically a bit complex.
o Pro: since every process has to be applied and done by computer, there will be no human interference and hence making it a completely corruption-free process, at least this is the idea the government has behind making it a completely computer-operated process.
o Con: Since the process is completely computerised, the whole money-making process is now shifted to the internet café,é and they can now demand an exorbitant amount of money to file taxes, as we cannot expect every citizen to be very comfortable with computer operations. The same thing goes with the tax officers who have been doing paperwork for many years, would find it difficult, nay, frustrating to complete the process, hence making unnecessary delay in their operation.
· This system will honour honest taxpayers. As listed already,y the incidents of harassment with the honest tax-paying citizens will reduce to a large extent, of course, they cannot be completely abated completed but they will be reduced to a very large extent. There will be a huge deficit in Vitamin R, which we call wanted.
While the Prime Minister has said that the reforms will keep happening, this has always been a recursive process and has to be done periodically rather than as a one-time operation.it is yet to be seen what more have to be done, already Mr Prime Minister has promised a holistic development and taxation programme for honest taxpayers, this no only instils faith in the general public but also increases the faith of a common man concerning the System, when the system takes care of the citizens naturally reciprocate the gesture, that has been the heard psychology always. Having said that I remember wise words of Max Muller from the Book What can India teach us, where Mr Muller goes on saying that Indian are immaculate and simple people with straight-set of mind you get what you give them, if you trust them, they shall reciprocate and the otherwise also stands true, in any case, Indians do not generally lie to anyone. Of course, this observation by Mr Max Muller might not stand completely true in today’s context but on a larger scale it remains true, when it comes to the herd’s psychology or a collective consciousness Indians still do retain this behaviour, the point I am trying to make here is that this step might harm a few but on a larger scale, it has huge benefits.
While there is a lot more to learn about it and we need to read the proper documentation that is yet to be given by govt in this regard. September 25 is chosen as the rollout date for the same. Let us wait and see what extra has been added to the Vivad se Vishwas Act of indirect and direct taxes 2020.
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