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It’s the same old tax system

It’s the same old tax system
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First Published: Sun, Sep 12 2010. 07 51 PM IST
Updated: Sun, Sep 12 2010. 07 51 PM IST
This is with reference to the editorial titled, “The new, old tax system”(1 September, Mint). Union finance minister Pranab Mukherjee and the top brass in the finance ministry may be genuinely interested in tax reforms, but the ground realities do not reassure India’s taxpayers that reforms will be really implemented. Perhaps the tax department is not yet ready for these reforms. The common man’s experience in India is that a tax refund takes a long time. And it is so easy to evade tax by just not disclosing a source of income. Further, the office procedures in the income tax department are not good enough to ensure speedy disposal of tax cases. For instance, taxpayers can be categorized based on their needs. Hence, until these things change, a new tax law would just be old wine in a new bottle.
—Narendra M. Apte
Foreign flows are a two-way street (“The cost of foreign investment”, 3 September, Mint). Only a myopic developing-country mindset is so focused on inward foreign investment, when, in fact, the Indian economy has matured to a point where our companies are buying assets abroad. Just like our information technology professionals travel the world and are able to sell their services to the highest bidder, so too, our capital should be able to travel globally and seek the highest return. That’s a hint in the direction of capital account convertibility.
Now, foreign investment into the country should be welcomed across any asset class. It’s ludicrous for a country with such little per capita capital to refuse anyone who wishes to invest in any asset class. The fear of pulling out in time of crises is ridiculous. Which investor, whether domestic or foreign, would not pull out in a crisis situation? It’s like refusing to build a house because it will collapse when a natural disaster strikes.
To look at this question from another angle, consider that if all mentioned restrictions are eased, the government will certainly find it difficult to run big deficits. A deep debt market will create some checks and balances.
—Aby Capri
The editorial “A plan to curb corruption” (30 August, Mint) highlights the threefold strategy proposed by the Central Vigilance Commission in its report on the subject. The spotlight on this vexed issue at such a high level is welcome. However, we are nowhere near any solution.
There never was any paucity of laws to arrest this cancer in our society; the problem was always in the implementation. As rightly pointed out in the editorial, the absence of political will has rendered nugatory any meaningful steps in the elimination of this obnoxious weed.
This trend, unfortunately, will only continue. When the political structure itself thrives on corruption, when members of Parliament and state legislatures are alleged to have bartered their votes for favours or even for money, the moral authority to punish will necessarily wilt.
The other aspect of this phenomenon is the public’s perception of the ethics involved. Whether it is the business class, from top CEOs to the street shop owner, or the common man, the act of providing and receiving prompt and trouble-free service only in exchange for some consideration has come to be accepted as the done thing. The vicious circle only snowballs. Thus, when all sections of society develop vested interests in the perpetuation of corruption, it defies logic that even strong administrative measures can eliminate it.
—N. S. Rajan
I agree with the assessment that corruption cannot be weeded out without political will. But corruption is more of a governance issue rather than a systems issue. Hence, merely addressing systems will not address this problem. The concerns today are:
1. Corruption has become institutionalized. The person does not matter;
2. It has spread to both the public and private sector;
3. The cost of fighting corruption today is more than the cost of corruption.
We need a critical mass of people who are willing to take on this challenge. One possible solution could be the Tea Party movement, like in the US.
—Rajneesh Rastogi
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First Published: Sun, Sep 12 2010. 07 51 PM IST