Past few days have witnessed lot of clamour, surrounding the revelations made by Panama Paper leaks. This latest incident has opened a pandora box, exposing many politicians and celebrities across the world. Unfortunately India, with 500 names, has also made into the disreputed list. I was reading an article in one of national daily, which delved into the issue of ethics and recent Panama paper leak. It highlighted the scenario wherein India's inequality in wealth and inequality in ethics is increasing alarmingly. I felt an urge to vet upon the issue and depose my perspective with regard to referred article.
There can be a multiple reasons for person to stack one's wealth abroad, in this case in "Tax Havens". Two of the most prevalent reasons are: Tax Evasion and Black Money (not in literary sense). Both the reasons have a large extent of overlapping and both in most cases differs only in name while the action undertaken in respective heads aims at same output. Black Money as a issue is largely in public domain with various measures taken by Indian government and multipronged strategies adopted worldwide like Black Money Act 2015 by Indian government.
Here i would like to discuss issue related to Tax Evasion. Taxation forms the most important and critical funding resource for various public works. Economy survey 2016-17 has highlighted the skewed taxation trends in India, with abysmally low 3% of whole population is paying taxes, compared to 40% in USA. India also has a low 17.7% of Tax to GDP ratio, which is way lower then many of the other countries. So in these worrisome circumstances many of the well to do individuals have resorted to tax evasion. In following paragraphs i would discuss the impact of these felonies on society as large.
CONTRIBUTION TO INEQUALITY OF INCOME
As noted earlier with such a distorted trends in taxation regime, large part of putative tax revenue that can be put to various developmental activities is still lying untapped. Revenue from indirect taxes cause more impact on common person's pocket, leading to artificial inflation. More income is spent for buying consumer goods, eventually leaving person with very less actual monthly income. The revenue that could have been spent on various developmental works like constructing roads, canals and implementing various wage employment programs for poors are affected due to inadequate revenue collection that enfeebles the government's ability to spend more on such works. Hence a self made inequality of income is created in society crippling countries development prospects.
CONTRIBUTION TO INEQUALITY OF ETHICALITY
Income tax deducted from salaries of employees and indirect taxes like VAT are largely borne by common man. There is hardly any possibility of evasion at this end. Paying tax signifies one's duty towards her country. The active role that a person can play in development of her country is through scrupulous tax payment. It is also a moral issue, where a person rates her duty towards her country as pre-eminent. While common person bears a large part of taxation, sadly wealthier are enagaged in deeds like tax evasion. This also depicts the reprobated ethical and moral values prevalent in our society. Therefore idea of inequality of ethicality lays vindicated.
In today's scenario where the topics like Good Governance and Sustainable Development has captured the human's imagination, it is imperative on our part, as a responsible citizen to pay taxes sedulously to help government to transform those imaginations into reality.
PS: I've attempted to write this article with a feminist approach where pronoun "her" is used instead of "his", while discussing issues which talks about society as a whole. Also some gender neutral phrases have been used like "common person" in lieu of "common man".
With Regards!
There can be a multiple reasons for person to stack one's wealth abroad, in this case in "Tax Havens". Two of the most prevalent reasons are: Tax Evasion and Black Money (not in literary sense). Both the reasons have a large extent of overlapping and both in most cases differs only in name while the action undertaken in respective heads aims at same output. Black Money as a issue is largely in public domain with various measures taken by Indian government and multipronged strategies adopted worldwide like Black Money Act 2015 by Indian government.
Here i would like to discuss issue related to Tax Evasion. Taxation forms the most important and critical funding resource for various public works. Economy survey 2016-17 has highlighted the skewed taxation trends in India, with abysmally low 3% of whole population is paying taxes, compared to 40% in USA. India also has a low 17.7% of Tax to GDP ratio, which is way lower then many of the other countries. So in these worrisome circumstances many of the well to do individuals have resorted to tax evasion. In following paragraphs i would discuss the impact of these felonies on society as large.
CONTRIBUTION TO INEQUALITY OF INCOME
As noted earlier with such a distorted trends in taxation regime, large part of putative tax revenue that can be put to various developmental activities is still lying untapped. Revenue from indirect taxes cause more impact on common person's pocket, leading to artificial inflation. More income is spent for buying consumer goods, eventually leaving person with very less actual monthly income. The revenue that could have been spent on various developmental works like constructing roads, canals and implementing various wage employment programs for poors are affected due to inadequate revenue collection that enfeebles the government's ability to spend more on such works. Hence a self made inequality of income is created in society crippling countries development prospects.
CONTRIBUTION TO INEQUALITY OF ETHICALITY
Income tax deducted from salaries of employees and indirect taxes like VAT are largely borne by common man. There is hardly any possibility of evasion at this end. Paying tax signifies one's duty towards her country. The active role that a person can play in development of her country is through scrupulous tax payment. It is also a moral issue, where a person rates her duty towards her country as pre-eminent. While common person bears a large part of taxation, sadly wealthier are enagaged in deeds like tax evasion. This also depicts the reprobated ethical and moral values prevalent in our society. Therefore idea of inequality of ethicality lays vindicated.
In today's scenario where the topics like Good Governance and Sustainable Development has captured the human's imagination, it is imperative on our part, as a responsible citizen to pay taxes sedulously to help government to transform those imaginations into reality.
PS: I've attempted to write this article with a feminist approach where pronoun "her" is used instead of "his", while discussing issues which talks about society as a whole. Also some gender neutral phrases have been used like "common person" in lieu of "common man".
With Regards!