Tax Department Vows Crackdown on Black Money
Speaking on Wednesday at a seminar on black money, Sudhir Chandra praised what is arguably India’s most-hated department: the one responsible for levying taxes.
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Taxpayers and company executives frequently complain – though rarely to police – that tax officers ask for bribes.
But Mr. Chandra, the chairman of the Central Board of Direct Taxes, threw out numbers to back up his claims.
It is to Mr. Chandra that tax officers ultimately report. In India, this is a job category that enjoys an even worse reputation than it does in most other countries.
Taxpayers and company executives frequently complain – though rarely to police – that tax officers ask for bribes to avoid fines, a closer examinations of their accounts or even just to get their tax refunds.
But Mr. Chandra, the department’s chairman, said things have started to change since he came into office in January. Speaking at the National Seminar on Black Money in New Delhi, Mr. Chandra said he “turned around” his department. To do this, he said he first ingratiated himself to his officers by doing things like speeding up leave approvals.
In return, he asked them to up the ante on tax refunds. As a result, Mr. Chandra said that a staggering 1.04 trillion rupees ($23 billion) have been returned to taxpayers under his watch so far.
On the other side of the tax equation, Mr. Chandra claimed that between April and mid-May, the department has collected 280 million rupees ($6.2 billion) in income tax – which he said is three times the income tax collection for the same period a year earlier.
Mr. Chandra also said his department has stepped up efforts to crack down on black money, saying that in the last two years it discovered 300 billion rupees ($6.6 billion) of undeclared income.
He vowed his department is committed to going after the “big fish” rather than the “small tax payers,” adding that of the 22 countries that can be considered tax havens, India has entered tax information exchange agreements with 14 of them.
One of the other speakers at the seminar was not wholly swayed by Mr. Chandra’s words. This was Kiran Bedi, India’s first female police officer and a high-profile anti-corruption activist. While she flattered Mr. Chandra by describing him as a “one man army” in the battle against black money, she also said people were generally not of the impression tax officials were targeting the “big fish.”
“There are a lot of questions of the aam aadmi (common man) that are not being addressed,” Ms. Bedi said, referring specifically to questions related to the ownership of bank accounts in tax havens like Switzerland and Liechtenstein.
Retired Supreme Court Justice P.V. Reddi, the chairman of India’s law commission, said that to effectively clamp down on black money, authorities “need to instill a fear of detection” in taxpayers. But for this to work, a culture shift has to happen among law enforcement authorities, too.
Former policeman and current head of India’s vigilance commission Sri Kumar said episodes of petty corruption among his former police colleagues were all too common. In one particular episode, he said a policeman demanded a bribe to allow his son and a friend of his to register a theft case.
Via: India Real Time
