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Tax collection and accountability of Its utilization
"poverty" A SUBJECT
:Should the tax collection system be siplified ? And more friendly :

Taxation has been around in various forms for a very long time, first tax was introduced for crossing the territory. All traders had to pay to use route and were a dictatorial practice of levying. Step by step tax system became boon for social cause and development of the regimes and their population began. For more development more funds were required so more taxations were introduced in the form of direct and indirect taxes.

 

When a person pays from ones pocket means one wishes to escape hefty taxes and likes to pay as less as possible, that developed corrupt systems also. This system began to give birth to black money. No country is escaped, it was little before but in this present world the black money in circulation is nearly no less than 2-3 times as far as I feel. Most these are either invested on properties, luxuries or some banks or countries which help maintaining secrecy. Some countries have more and some less. Especially developing countries have been affected by this virus fueled by corruption. Excessive of corruption has made accumulation of black money as common. Each day we can see in TV and read news paper at least 3 or 4 cases of corruption cases. If all unaccounted money is brought to account will change the social pattern, collected from this amount will be enough to upgrade societies. Accumulation of black wealth is bad for any economy. Measures should be adopted to make friendly atmosphere so one is encouraged to avoid black money. Governments can take back unaccounted money (if not earned through corruption or other illegal sources) ok come give back to us your unaccounted money with nominal penalties or invest in long term social sectors without penalties and we will also let you share some profit, this would be an encouraging step towards minimizing to some extent.

 

System of taxation is so complicated and contains many loop holes to escape. In present system of taxation if one pays heavy, one will have no more reward for ones hard work, up to 30-40% of what earned is paid as tax especially in this competitive business world? If we calculate an individual pays as tax up to 50% or odd, as direct and indirect taxes, apart from paying direct tax he also pays tax for tooth paste-brush, soap, and toilet paper. If this continues one day may come (when all sources of taxing is ended) when tax officer will be watching you how many times you pee, more you pee more you pay tax because you pee more as you drink more and where the money comes from to drink more. So the Taxation systems should be simple and un- hurting. Tax payers are generally treated as if they are culprits due to drawback in the system, process needed so trust the citizens. This I have made and this I pay as tax thats all, it should be so simple.  Service class pays more tax than the business class because business class has more ways to escape. There should be system so equality is maintained. Tax should be levied form each earning member in the population so every one is covered, further to this, incentive to be provided to the payers such as social security, health and most important one should have right to know how and why his taxed paid money is  spent by the governments.

 

Corruption plays every important role to multiply government and social expenses incurred. No country has escaped as far as I think, some countries have more and some have less, some have corruption in top level and some starts from bottom to top. It can even go as far as 4-10 times as corruption money is shared from bottom to top when the government has corrupt politicians and bureaucrats. So Governments should find process as accountable and answerable for expenses of money collected as tax from the citizens. Even present democratic political systems, election, buy and sell members or exorbitant election expenses are very much responsible. Also bureaucrats take advantage of lack of human rights and information to ordinary citizens. Lesser corruption is for lesser the burden of taxes on citizens.

 

 As far as indirect taxes are concerned these have to rational tax system say for if you charge 2% as tax it should be same for all items and county.  This system of tax needed to be at first stage of manufacturing and nothing until reaches the retail customer in the store. So instead of controlling all the steps only need to control one area thus have better control. In most cases irrational sales and excise tax becomes a source for manipulation and soft way through to corruption as what is sold and what is declared and what is approved and what share for the approval. Over 50% of manipulations happen in unorganized sectors as system is too complicated with many loop holes for manipulations. Corruption has reached to its intense that law has become a source for earning money, therefore, as far as possible reduce human handling to get full advantage of introduction of any legislations or tax. For sales and excise best way to have camera operated systems for inspections which can analyze the position to act accordingly. Solution to this is only to curtail the areas of corruption make tax laws the easiest. The more the stages of taxes the higher the chances for the escaper and red tapism or corruption.  Have limited regulation staff but better paid so they do not need corrupt practices

 

Should we not have very simple and clean system of taxation? Tax system should be so simple that even illiterate person whether doing business or service can understand how much he earned and how much he has to pay as tax; this is friendly tax system. No books maintainence and need to keep for long time, pay this year and forget get busy with your work.

Should the direct taxes be levied on remittance?

  1. Based on average percentage of certain years, as how much tax paid and sales remittance of business manufacturing, business service sectors low medium and high, rural and urban, Private or Government service class low, middle and high, rural and urban. Agricultural sectors low, medium and high, handloom and cottage rural and urban.
  2. This average can be helpful to set as tax on sales remittance. Person may be needed to show total sales of the year and pay tax or banks can be of high help.
  3. Direct deposit, credit or debit card, drafts or cheques system may be of high help even in small transactions to avoid cash transactions and are through banks only. In many countries taxes are charged on the credit or other card holders, this practice only encourages currency note transactions in order to escape extra charges as tax. Tracking of currency notes is not as easy as the credit cards. Also this helps curtailing black money flow.
  4. Banking sectors plays important role so banking sectors to be made more effective partner in collection and calculation.
  5. Taxes should not be very high that becomes burden rather endeavor to be to cover major portion of the population whether in organized or unorganized sectors.

Should a Government be accountable and responsible for over and unwanted expenditure?

       Does tax payer have right to know as how much collected as tax and how much is spent and where and why. Is it not the responsibility of the Government to inform periodically citizens of what has been done out of what? Can be done through new papers or other easy sources.

        Organized and management needed to curtail over expenses. If an item cost 1$ in retail market it should cost much less because it is direct factory procurements and agents are not involved. If expenses done in managed way expenses will come down will give less Burdon of taxes on tax payers.

       Proper systems to be adopted for secret inspection by secret agencies that can even get quotation from other resources secretly and authorized to ask why this was not procured this source. This secret agency should be top secret, if one state to buy, agency should be from other state or the other way whichever can be more confident.

       Practice should not be to buy because it gives more commission quality and use of the product irrelevant.

       Main root of corruption begins from politicians, means the system of election is wrong. High amount is expended during election process. Why this is Tax payers money? (though indirectly)

All above mentioned are only my observations and not to annoy any one

Should the Tax collection be simplified and accountability of Its utilization be made mandatory for all responsible?