Wednesday, January 31, 2018

It's called quid pro quo.

India has many celebrations but nothing generates the excitement as the annual budget, as television presenters and assorted pundits analyse each sentence dropping like gems from the lips of the Finance Minister. Today is the day of the budget and the whole nation is holding its breath as cameras follow each step of the Finance Minister and microphones try to catch any word that he may speak. In the past the major part of the speech used to concentrate on indirect taxes because this is the greater source of revenue for the government. In the 2011-12 budget customs duty on bamboo and cranberry products were reduced from 30% to 10%, causing much confusion for ordinary people like us because bamboo grows everywhere in India and cranberry is not used in any Indian cooking. With the adoption of the Goods and Services Tax, or GST, indirect taxes have been taken out of the budget, so the Finance Minister is expected to talk about direct taxes, which comprise personal income tax, property tax and corporate taxes. Even poor people are forced to pay indirect taxes, which is considered regressive, and high prices stop the poor from affording luxuries. Politicians and civil servants are convinced that all citizens of India are thieves and avoid paying taxes. India is "a tax non-compliant society and too many people evade taxes" said the Finance Minister. To catch all the imagined tax evaders the Prime Minister turned 1.3 billion people into crooks when he suddenly withdrew high denomination notes from circulation. Wealth owned by 770.7 million people out of a total of 1.3 billion is less than $10,000, and of the 60.1 million who own between $10,000 and $100,000 most will be at the lower end of the scale. Comparing with economies at a similar stage of development and with developed economies, Kundu and Bhattacharya found that "the idea that India is a nation of tax evaders is a myth". They also looked at corporate taxes and found that, "Firms with profits less than Rs 1 crore end up facing a tax rate slightly above 30% while those with profits above Rs 500 crore face a lower tax rate of 26%, data released by the finance ministry as part of its budget documents show." One section of the population can multiply its wealth by 500% in complete safety and these are our politicians. Around 45% of people had to pay bribes to civil servants last year to avail of services. Indians see the system as grossly unfair because we get nothing in return for the taxes we pay. "If my future is secure, we are happy to pay the government," said a businessman but "while it's my duty to pay they don't respond with anything". Don't treat us like crooks. Give something to pay for.

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