According to the report, the number of income tax returns filed fell short by 45,000 as against the issued NTNs. This is undoubtedly an intriguing situation, which indicates that despite the recorded information with the income tax department about the NTN holders, who did not file the income tax returns, appropriate action was not initiated against these errant NTN holders.
This shows the apathy and lethargy on the part of the tax department and also the inexplicable helplessness in this matter.
It may not be out of place to ask that when the department cannot effectively pursue the non-filers amongst the NTN holders, how can it be expected to bring the tax evaders, particularly those that continue to remain outside the tax net, within the tax regime.
The lack of the desired level of efficiency in the performance of the duty honestly appears to be the crux of the problem underlying the relatively small number of taxpayers within the fold of the income tax department out of a population of 150 million in the country.
In consequence, the ratio of tax revenue to the GDP remains deplorably low at 11 percent as compared to other countries in the region. It has been suggested by the CBR officials that with a view to inducing new taxpayers to file income tax returns, including the non-filers holding NTNs, a scheme to offer amnesty against their tax liabilities of the past five years may be launched.
The argument being that since a new filer of income tax is confronted with the probe to declare his source of income of the last five years, he is not inclined to file income tax return.
To remove this impediment in the way of compliance and to motivate people to comply without fear of being made to answer for their errant past, they should be offered immunity from being answerable for the past, which should be treated as a closed chapter.
It may, however, be emphasised here that like all previous amnesty schemes, this effort too would have limited success and soon thereafter we would see a fresh move for another amnesty in some shape or form.
It is surely not so difficult to comprehend that with every right, there has to be a corresponding obligation and payment of due taxes is a civic duty towards the state.
Compliance cannot be obtained by offering amnesties alone, at some point one has to draw a line and enforce the law. It is only possible if the authorities go after the tax dodgers rather than employing such ploys to camouflage their own ineptitude.
What happened to the gains that were to accrue from the tax survey done in 2000 and the widening of the tax net exercise of the CBR? Why is it not made public that tax officials were unable to obtain the record of the account-holder of the Central Depository Company where the stock market share certificate are lodged? Why the people are not told of the difficulty in obtaining information from the Defence Housing Authorities around the country with regard to the people that own property there? Let us all be very clear once and for all that as long as we have a culture of 'Holy Cows' that are beyond the grasp of the law, a culture of 'Rule of the law', be it the tax law or any other cannot develop in this country. It has been rightly pointed out that a large number of persons owning both fixed and mobile telephones, registered as car owners, paying utility bills etc, may be still outside the fold of income tax filers.
It is estimated that about 4.6 million persons are subscribers of fixed telephones and three million are in possession of mobile telephones. Additionally, the survey has also compiled statistics of the number of bank account-holders and those having electricity and gas connections.
Thus, it is estimated that a minimum of 3.5 million persons and other entities should figure as income tax payers against the present number of about 1.6 million.
Instead of just offering these numbers to highlight the extent of tax evasion, why we cannot do something to tackle them effectively? In this respect we make bold to say that for all transactions within the country, like the national identity card number, the National Tax Number should also be required.
To start with, we make bold to propose that for all sale and purchase of land, the National Tax Number should be a requirement, this would not only bring a large tax evaded sector with the tax fold but would also stem the unbridled speculative activity within this sector.