Narendra Modi government has made several references to the achievement of our people in the field of software. It is a clear indication that even before Narendra Modi became PM, Indians were doing good in the software domain and there is increasing computerization of activities of our day to day activities. In the urban areas we are seeing electronic ticket printers held by conductors, electric bills produced, debit card swipe machines for transactions, ATMs, on-line entries for applications forms for many activities. All these look great for the visitor or a ordinary citizen as it makes the life easier.
The important things that is needed to live a life in a meaningful way to many is money and it is always in shortage. The shortage is not due to the inability of citizens to earn but the money taken back by the governments in the form of taxes and providing very little in return because of the huge corruption and brutal scandals over the period of time. The scale of scandals is mind boggling and we have become immune to lakh crore scams also. The greed of the rich and the poverty of the ordinary Indian form the two extreme ends of the richness scale. This is not only peculiar to India but to all nations civilized and barbaric.
The rich man after making a threshold limit of money, reinvests in many schemes and ventures and his net-worth keeps increasing. The banks happily fund these megalomaniac rich with little foresight and make huge NPAs which will become a burden on the poorest citizen of a given country. The government always loves money and it follows the money with utmost loyalty because money is the opium of politicians. Several schemes that are made and implemented are generally more beneficial to the rich than to the poor. The greed of the rich is clear in a simple case of the usage of subsidy by the super rich Indians. These rich don't want to pay the taxes on the wealth they have generated and force governments to give several different forms of tax concessions.
These rich businessmen and individuals make multi layered groups of companies and round trip the money to avoid the taxes and then go on to preach the poor about philanthropy. On the other hand the poor man doesn't have the luxury of reinvesting the money as he doesn't have any even to feed himself. What little money he has, parts of it will be lost in taxes put on each and every product he purchases and whether these taxes are given back to governments is highly doubtful. The ordinary poor man in the village and the richest man in the country shall have if god permits 2-4 meals a day and the tax component will be will be proportional.
The definition of luxury is very important to understand because for the poorest person who has no opportunities and no skills has to fill his stomach and the richest man too has to fill his stomach. The scales of life style may vary but the basic needs should be fulfilled first for any living entity. The taxes on the most basic goods/services and prices should be put at the minimum keeping in mind the poorest citizen in this country. The luxury items which are consumed by the increasingly rich citizens should be increasingly taxed. It is here the tyranny of taxes becomes very visible. Two items will tell the entire story.
The governments have increasingly raised the taxes on the petroleum products which are used by the poor and rich without any distinction. The average indian too has to pay the same price on fuel as does the richest Indian. Two persons going to a factory one a office assistant and another a senior grade officer both coming on vehicles due to convenience with different levels of salaries have to buy the same product at the same cost. The one with lower salary will feel the pinch of taxes more than the one with the higher taxes. The other case is that of the farmers where the bigger and more connected farmers are usurping all the benefits of loan waivers while the small farmer is not getting the largesse of the state.
Why cannot the government which has rolled the Jan Dhan accounts also provide a PAN to every income generator citizen of this country. Once this is done the tax collection should be completely digital with the current tax payable should be available by sending a SMS instead of filing a set of forms declaring the several transactions. Any financial accountant will tell that there can be two types of transactions - Credits and Debits and sum total of credits and debits should be matching at the end, else there is a balance issues.
Every PAN should carry the following information
1.The money received to the concerned person from all sources and should be in two categories taxable and non taxable. The transferable between the bank accounts of the same individual should also be identifiable and treated accordingly.
2.The money paid by the person to various sources and should be categorized as general, non taxable. The general payments may be anything and the non taxable payments should include all the tax benefit scheme payments.
3.The tax to be paid or return that is available to be gained
To achieve this every transaction done by the individual through banks or other channels should be coded accordingly and every single paise in the system that is moving should have the source and destination declared. The various transactions should be linked to the Permanent Account of the tax payer. Just like we are seeing the bank balance we should be able to see the tax balances of the individuals. To achieve such a simple taxing system, the various financial arms should share information. This is the kind of digital india that an ordinary tax payer would expect which is transparent and not doing unnecessary clerical work about his expenditure and saving details.
The data should be generated once and it should be managed effectively. The entering the same data repeatedly is the most unproductive types of work that a tax payer is forced to do year after year and still we claim to be of some repute in software technology. I hope the government does something that is beneficial to the ordinary tax payer by using the data that is generated at its end.
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