The government has done well to compulsorily retire 12 income-tax officials facing serious charges of corruption. By invoking a rule that has sparingly been used, the government has sent out a stern warning on zero tolerance of graft. Wrongdoing must be punished, and sacking errant officials, besides naming and shaming them, would deter others. However, the process must not be arbitrary. And investigation, if any, launched against these officials must be completed swiftly.
The charges vary from corruption, extortion and disproportionate assets to malafide assessment orders and sexual harassment. The root cause of corruption is misuse of powers bestowed on the tax administration. A case in point is searches and seizures. These are archaic and blunt instruments of law enforcement, leading to misuse of power and taxpayer harassment. This goes against the tenet of a non-adversarial tax regime, creating uncertainty for individuals and businesses. Of course, enforcement will entail some discretion, but safeguards must be in place to ensure that it is not used arbitrarily. This, in turn, calls for intensive training of tax officers.
We need intelligent data mining, using big-data analytics, to create tax demands proof of evasion and avoidance. Already, India has the GST Network and the IT backbone for taxpayers to pay tax and claim refunds without having to interface with a tax official. More reforms to minimise interaction between the tax department and the taxpayer make eminent sense. The government should also limit the number of senior posts joint secretary and higher just as it is done in the army. Corruption in India is endemic and systemic, and transparent political funding is part and parcel of eliminating corruption.
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