Just 15 million Indians pay income tax. That is a little over 1 % of our population. Governments in India over many decades have tried their creative genius in trying various combinations of wresting out more out of the same percentage population.
But there are so many exemptions – something that this year's budget has tried to address, albeit in a wonky dilly-dallying and confounding way. The key question is, when you are earning and using some facilities by the government, just *pay* tax.
I know that people say - what have the Indian governments over decades done to improve quality of life. We have traffic, garbage – all flowing over, we have ambulances with patients waiting for traffic to clear. And we have short-sighted government policies to blame for this.
Had there been no subsidies, had there been the mindset of not 'taking pity' at some people, but trying to include them through bold measures such as FDR's CCC, many Indians would not have ever had feelings of entitlement. #EntitlementIsBad, #PayTaxes, #MakeTaxesWork
Why should there be any slab exempting anyone from paying taxes. If they are earning, they pay. Naturally, they pay less. But they get into the habit of paying for services that they want to use. That is normal, right. #EntitlementIsBad, #PayTaxes, #MakeTaxesWork
Yet, we find large swathes of the population being excluded out of the tax bracket and we find government after government wailing that they are not collecting enough taxes. Read this article by TN Ninan of @bsindia : business-standard.com/article/opinio…
The solution lies in the painstaking approach of removing exemptions (which has been tentatively attempted in the fiscal 2020 budget in India) and removing all tax slabs. Ensure that everyone who earns pays taxes. But ....
Also show intent to put those taxes to use. That is critical. People are more patient with governments than they are with other service providers. They intuitively know that running a nation is a complex thing and governments need some time to react.
But, we in India, have been patient since 1947 – the year of our independence. But we have not been given the all-round infrastructure that any citizen anywhere in the world should expect out of any government.
What we have instead is a huge segment of population born with the feeling of being entitled to exemption and also born with the feeling of not expecting any meaningful development work from any government. #EntitlementIsBad, #PayTaxes, #MakeTaxesWork
Things are beginning to change. But half-hearted and tentative pokes don't drill holes or create any sort of a dent. The idea of granting subsidies crippled the minds of generations of Indians. Good to see them go one by one. But, the hand taking them away should be firmer.
Good to see exemptions go, but the hand taking them away should be more decisive. #EntitlementIsBad, #PayTaxes, #MakeTaxesWork
However – very importantly – I some some hands creating some infrastructure and some policies – but the limp hands on the financing sides are poor team members to supply the firm hands creating policies of a rising nation.
Removing the feeling of entitlement is crucial. I have seen cab drivers pay more for better petrol available at filling stations of a multinational and scoff at paying less at stations many government owned oil companies, because they suspect adulteration.
People pay for quality. If people see the infrastructure around them improving, they will pay. In the case of governments, if they see the intent and some affirmative and continuous action, they can be brought to pay taxes. #MakeTaxesWork
