I read some stats sometime ago and I was unpleasantly surprised- 3.15 crores paid income tax in 2006-2007. This is after a healthy growth from 2.85 crores in 2002-2003. I know what you are thinking- aren't we supposed to be the second largest populous country in the world and for a population of 114.7 crores (July 2008 est.), 3.15 crore taxpayers seems like a drop in the ocean. Another interesting statistic from the CIA fact book is that the labour force in India is about 51.64 crores (2007 estimate). Another fact- the highest tax payers list does not have names that one would expect to see- why is that?
I know I am not providing answers. Is tax evasion in our blood? I don't think so but at the same time I cannot ignore the status quo of the salaried and those at and below middle class since a long time. I believe all this points to growth-impairing economic policies, high taxes, poor enforcement, bureaucracy, corrupt government and complex and rigid laws and procedures. All this seems to have sown the seed that paying taxes is only a waste since the monies are not being properly utilized for public welfare. I believe this is also the reason behind the apathy of the citizen.
Maybe lowering taxes, giving incentives to people who contribute to community, etc. will increase the national wealth without spending monies on administering and collecting taxes. All that extra funds can be spent on public welfare. Wouldn't that be great?
Anyway, I have to admit it- I still don't know why some people evade tax.
P.S. To keep matters straight- I am not a tax evader; just an ardent fan of Nani A. Palkhivala.
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