‘Babudom’ is a phenomena that is most pronounced in the IT department. While we all know that bribes are paid to get things moving, attempts to quantify it have remained ambiguous. This study takes into account what the common citizen experiences. In a sample survey conduced in 2006, it traces his concerns and perceptions about petty corruption estimated at Rs 496 crore for this period. Based on the profile of those interviewed, following pointers emerged:
3.14% people pay income tax (Rs331.49 lakh as of 2002-03)
5.7% (91.16 crore households) had some interaction with the department (13% in urban and 3% in rural areas)
46% visited the department a minimum of 4 times.
20.4% of those who interacted with the department had paid bribe (1.16% of total households paid about 24 lakh),
62% of those who visited, felt that corruption had increased during this period.
Corruption in high income states is higher than in low income states.
47% of bribes were paid directly to IT staff; 28% through CAs and 15% through agents and touts.
While the I-T Department is notorious for being corrupt and harassing consumers, they have their story too, some of which does hold water. They feel people wake up at the last moment to file returns. Resultantly workload 15 days prior to last date increases manifold. CAs, touts and agents collect money from clients in the guise of bribes and tarnish image of the department. Tax payer’s desire to minimize tax liability/burden or to cover lapses creates a pervasive corruption culture.
Issues of Concern
Repeated visits: Procedures like incomplete formalities and clarifications on paper work are reasons for revisits. 37% returned because of non-availability of concerned staff.
Procedural problems: 41% (including literate people) complained of tedious paperwork.
Non-availability of forms: Common occurrence that resulted in delay and harassment.
Low level of awareness amongst taxpayers: Information has not percolated down, resulting in confusion, anxiety and lack of awareness amongst tax payers, increasing their dependence on external sources.
Level of trust between taxpayer and the IT department is extremely low.
Penetration of Corruption
67% respondents interacting with the department felt that officials were corrupt (71% illiterate, 79% professionals and 81% high income people felt that corruption was high)
Despite setting up a Complaint Redressal Helpline, computerization of records and centralization of refund dispatch, 40% people felt that corruption persists.
39% respondents felt that the department lacked seriousness/commitment to fight corruption; 22% found them indifferent; 23% felt things were changing gradually and committed levels were going up.
35% found service quality of officials abysmally low; 36% felt it was good; 29% were indifferent.
23% respondents from low income states experienced corruption every time they visited the department while 10% in high income states did so.
Taxpayers can either go in for a long/tedious process or take the alternate route of paying bribe and getting the job done faster. 30% used the ‘alternate’ route (32% in low income states and 27% in high income states).
55% paid bribe payers for filing returns, getting PAN card, IT refund, seeking benefits (under assessment, reduction in penalty, closure of scrutiny). Average bribe for getting tax exemption was Rs 325 and for ensuring tax refund Rs 2141.
Initiatives have been taken by the department to streamline operations, bring in efficiency and transparency and minimize corruption. Saral form; Pan Card outsourcing/tracking through Internet; using technology to file returns via Internet; setting up help lines with 130 help centres across India to facilitate small tax payers; computerizing returns; bringing transparency by outlining criteria for short-listing of cases being made public and tax payer’s service have been specially set up to deal with the high pressure of work.
There still remain unaddressed issues that need to be taken up to make the department more efficient and ‘clean’. Recommendations include:
Reduce repeated visits to the department by developing alternative channels (banks/post offices/Internet) for collecting returns; use call center network to provide information on procedures, queries, tax refunds and have comprehensive website with regular updates on information, status of refunds and FAQs.
Process returns in chronological order on first-come-first-serve basis as per return receipt numbers.
Scrutinize taxpayers by transparent norms (computer software to highlight cases).
Educate taxpayers (seminars, training programmes, open house discussions) and employers must train new recruits on IT procedures.
Effective citizen charter to be in place in consultation with taxpayers.
Each tax office to have government appointed advocates who resolve issues
IT employees should be suitably trained, motivated, rewarded and empowered.
Strict action against defaulting employees should serve as a deterrent.
Aspire for having a world class taxpayer system.
Establish a tax culture which is based on trust and where taxes are paid willingly.