No body likes to be taxed but if a government looks well after its citizens most people would not mind paying reasonable amount of taxes. I remember during the 60s tax exemption was a measly 5000.00 and upper limit of income tax was about 90% or more. Those days we had large families because our parents had no TV n Radio stations didn’t work 24×7 . 5000 was too meagre a sum to support a large family 6-10 members even those days. If we compare price index of those days to now prices of everything have multiplied at least a 100 fold. Even if we take it as 1=100 ₹ 500000.00 exemption today would be as bad ₹ 5000 then but the exemption limit is about 2.5 lacs now. That makes an average Indian today even poorer than he was 50-55 years ago. Its true we have smaller families now but we should not forget we had joint families then . We lived together in one home very economically . Those days food was cheap but luxuries were unaffordable . We somehow managed to eke out a living. Those days we walked to schools, later our children used school buses and now our grand children go in chauffeur driven decent cars.
These days , with apparently large income n smaller families , life is still not easy. Basic needs like food ,shelter , transportation , education n healthcare is still very expensive . Thanks to the new technology , luxuries have become necessities n affordable . Savings have become increasingly tougher.
During 70 years government did not invest enough in infrastructure , education , healthcare , personal security, social security etc. To top it all we had monumental scams. Funds sanctioned for public utilities were siphoned off by corrupt n heartless politicians. People lost faith in government to provide basic amenities n started fending for their education health etc. Due to poor public transportation car , once a luxury, is now an absolute necessity . With change in lifestyle TV , Smartphones , internet etc unknown until recently have become essentials. If people pay for their basic needs , personal security n social security, retirement plans insurance etc they have very little left to pay for taxes n even less inclination to do so.
It’s true only a little over 5 crore people ( 4% of 130 crore ) pay taxes but our clever politicians have brought virtually every Indian under tax net with murderous rates of indirect taxes. Vat n service charges on everything from electricity, telephone mobiles travel food medicines personal care rents etc. Nothing has been spared . We are being taxed round the clock even when we r doing nothing or buying nothing.
During earlier regime , while paying taxes we felt almost guilty of funding the scams because scams had become our national occupation. These scams severely eroded the credibility of the government n even their right to tax the people became questionable . Pay more taxes to support bigger scams ? One would rather save it for retirement plan because no one would like to end up in a dilapidated old n infirm home. If this government improves the level of healthcare education n transportation n social security why won’t we be willing to pay our taxes honestly ? I’m sure people won’t mind paying every tax n any new tax for a cause. People in developed countries are tax compliant because the tax collected is ploughed back in development . Infrastructure defence Unemployment allowances etc. In developed countries government schools n hospitals are world class but here nobody wants to use them . People go there out of no choice. Government should give people a cause for tax compliance. Mere penalties for non compliance will not change things. Our very ingenious people will always find a way to circumvent laws n if ever caught can wriggle out of it , u know how.
This write up in no way justifies tax avoidance. It is only an attempt to understand the mentality of tax evasion n possible remedies to curb that instinct.
– Contributed by Shwan Baxter