IF you are amongst the top 400 taxpayers of the country, you have reason to be happy. You are now eligible to receive a ‘privileges card’ from the government which entitles you to service with a smile. Now you can earn ‘excellence awards’ and special access to VIP lounges at all airports. You can walk right past the rest standing in line at immigration counters, and proceed straight to the ‘fast track’ counters where the questions are short and the greetings crisp. Your baggage allowance will also be raised, although in all likelihood, this measure will only apply if you travel on the government’s airline, which you probably have not done in years. But none of this is as exciting as the prospect of having an audience with the prime minister at the award ceremony, and the opportunity to display your newly acquired credentials to your peers.
All this is very well. Clearly, the scheme to reward top taxpayers with
small privileges is a bit of a stunt, designed as it is to awaken a
sense of obligation in others. If it works, that will be good, but it
will take a little more than carrots of this sort to bring a culture of
tax compliance into existence. Specifically, it will take a stick or two
as well. For instance, in the last fiscal year the government finally
came around to serving tax notices to almost 80,000 non-filers, and in
return got 8,000 of them to file. That’s a hit rate of one in 10. What
happened to the rest? Perhaps a report ought to be published of that
entire exercise, along with an action plan about what will be done with
the remaining nine who still prefer to stay outside the net. The carrots
being dangled before the big fish are fine as they stand, but our tax
culture is unlikely to change until a stick is brought into the picture
as well.
Published in Dawn, July 17th, 2014
Published in Dawn, July 17th, 2014
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