WEEKEND LIGHTER: Simplify tax procedures
WEEKEND
LIGHTER*: Simplify tax procedures
(March 11/12, 2017, No.10/2017)
Feel free to mail your views on this
edition of WL to mgwarrier@gmail.com
*Weekend Lighter is posted every
Saturday @mgwarrier.blogspot.in
Section III:CAG interview
I
Cover Story
Simplify tax procedures*
This refers to the report “Cost
accountants’ body to train 15 lakh traders in GST basics over the year” (HBL, March
9). The move by ICAI will be welcomed by all. To
borrow a word from Amartya Sen, India
has inherited a ‘despotic’ tax system from the British and we have not cared to
revamp it all these years.
If someone needs a
proof, do go through the hard print copies of Budget papers of central or state
governments. Though thousands of copies of these documents are printed every
year, most of the print copies go direct
to raddi-walahs, a few months after presentation of budgets. Very few people go
through the budget papers and those who go through, focus mainly on areas of
their own Interest. Of course, tax consultants
benefit from the ambiguity in provisions of law and multi-dimensional
exemptions which can reduce the tax burden in many cases, considerably.
The inadequacies in the
tax system and the need for and advantage of taxing the rich are debated only
in class rooms. GST is likely to address some of the issues of multiple
taxation outside income tax. Think of a day when the tax payable by us is just
a percentage of our income or expenditure, with a maximum of four slabs with
total exemption up to a threshold level. For annual personal income the
exemption limit could be Rs5 lakhs and for individual expenditure Rs1000/-.
We pay income tax at
source and again pay tax on the balance received when we use the residual
income to buy goods or services. Just
think about this calmly. We need to debate possible options to simplify the tax
system, keeping the net revenue of the government from taxes intact as money is
needed for government expenditure.
Time is opportune to consider
agricultural income and income from any
source coming before tax to the hands of citizens, for being taxed. Gods and
organizations/institutions having income beyond a threshold level should be
assessed for tax purposes.
A related issue is
wealth and accumulated assets in various forms. All these idling with
individuals and institutions should be mapped and brought to the mainstream
database. In addition to recovery of costs for providing security and other
services, there should be clear disincentives for idle assets including
uncultivated agricultural land, unused built-up areas and so on.
M G Warrier, Mumbai
*Submitted version
of letter published in The Hindu Business Line, March 10, 2017
II
RECENT RESPONSES
Reinvent cooperatives!**
The message contained in the well
researched article “Cooperatives should reinvent themselves”(Business Line, March
7) has come at the right time. The quote from Edgar Parnell exhorting
cooperatives to shun leaders who are “…ego builders, recognition seekers,
hijackers, political ladder climbers…” is the most appropriate to describe the
parasites to be avoided by cooperatives in 21st Century India.
Cooperatives across the country had
more than their due share of problems
post-demonetization. While primary(urban) cooperative banks whose functioning is similar to mini-commercial
banks are regulated and supervised by RBI, the three/two tier structure of
cooperatives comprising State and District Cooperative Banks and thousands of
primary cooperative societies have multiple regulatory and supervisory
oversight involving RBI, NABARD and Registrar of Cooperative Societies(State
Government).
There is urgency in finding a
solution to a problem that has arisen due to continued neglect of an
institutional system which has been serving the semi-urban and rural areas of
the country, with all constraints. There are no alternative conduits to
ensure banking service to their
clientele in semi-urban and rural areas. The cooperatives need to survive, and
issues like politicization, inadequate skills or problems arising from the dual
control of cooperatives by Centre and states should be set aside by judiciary,
governments and cooperatives themselves for a short period. There is need for
cooperation among these agencies in solving the immediate problems the
clientele of cooperatives are facing today.
Several short-cuts are being tried by
state governments and cooperatives which can only lead to more complications.
The short-cuts include bypassing DCCBs by state cooperative bank (as in
Kerala), diverting the business now being done by cooperatives to other
agencies and taking the problems to courts which helps in postponing
decision-making. The historic reason for the present state of affairs include
the straying away of NABARD constituted
with the specific purpose of supporting the institutional framework responsible
for agriculture and rural development from its focus on cooperatives and RRBs
to greener pastures like Self Help Groups with commercial banks’ involvement.
At this stage Centre should assert
and empower state level task forces involving RBI, NABARD, banks and state
governments to resolve the problems locally in a time bound manner.
M G Warrier,
Mumbai
**Submitted version of
letter published in HBL on March 8, 2017
Politicization of economics
Apropos Aarati Krishnan’s article “Cracking the GDP
mystery” (The Hindu, March 7), one has to admit that unbiased analysis of facts
and events has become a rarity in the Indian media and articles like this gives
the comfort that so long as The Hindu survives, balanced views will have some
space to get published.
This lament is in the context of the
polarization of not only politicians and their parties, but economists,
analysts and media groups into pro-Government and Opposition teams, an
unhealthy trend of the current century India which has crossed tolerance levels
post-November 8, 2016.
The criticism unleashed last week
when CSO released some GDP-related figures last week was hasty and hazy. This
article proves that with all blames statistics and therefore statisticians are
made to shoulder, while interpretations can differ, figures won’t lie and are
verifiable. Of course, in India, commensurate with the delay in various other
sectors, accurate and final CSO figures also come out only after their “Use
before” date!
M G Warrier,
Mumbai
III
Leisure
CAG interview*
http://www.thehindu.com/opinion/interview/we-will-seek-audit-of-the-fiscal-impact-of-demonetisation/article17424354.ece
At a time when audits are getting
complex, governments richer and forms of corruption and maladministration
extremely difficult to detect, the Comptroller and Auditor General (CAG) of
India has suddenly landed in the midst of unprecedented opportunity and
challenge: besides the historic task of keeping a close watch on the Central
and State governments, it is now auditing several public-private partnerships
(PPP), the UN Headquarters, and is poised to become part of the new cricket
dispensation. While holding forth on a variety of subjects, CAG Shashi Kant
Sharma stresses the need for federal auditors to play a key role in Goods and
Services Tax (GST) reforms. He also reveals that the CAG would soon begin
auditing demonetization and its fallout.
*Use the link to read
the interview
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