Opinion
Mint Quick Edit: Heed the words of India’s top revenue official
Summary
- Revenue secretary Sanjay Malhotra asked tax officers to be mindful that tax collection must not hurt industry and the economy. Given the risks of overzealous taxation, his words of caution mustn’t fall on deaf ears.
With social and development spending rising steadily, government finances have been under pressure. This seems to have put overzealous revenue authorities on a constant lookout for how to squeeze more money out of tax assessees.
If such a pursuit goes overboard, however, it risks roiling India’s investment environment. That Indian authorities appear mindful of this danger is clearly good news.
Also read: A fresh look at income tax: Will the review lead to real change?
On Wednesday, revenue secretary Sanjay Malhotra told tax officials to be careful, lest they end up hurting industry and thus the economy. Indeed, our record on tax stability has taken blows in recent times and accounts abound of firms and individuals being slapped with tax notices.
While efforts have been made to simplify laws and ease compliance, cases of staggering tax demands from corporates create an impression of revenue maximization being on overdrive.
Also read: Policy hazard: Either-or taxation could send us down a slippery slope
Litigation over tax needs to reduce and all liability requires clarity. In general, taxation should be free of coffer-filling anxiety and must always aim to support processes of economic growth, in which investor confidence plays a significant role.
The top revenue official’s words of caution need to be heeded by all tax officers.
Also read: Ideal taxation: At least assure investors of tax stability as a principle
