About the Topic

Trust based compliance as against Enforced compliance – Which is more effective?

The tax system that we have at present is based more on the elements of distrust. Trust demands respect for the inherent value and rights of a human being. Distrust kills transparency, creates divide and fuels manoeuvring to suit ones motive. If a government distrusts its people, people are likely to reciprocate by distrusting the system. Voluntary Compliance emanates from a trust based taxation regime. For which, it is imperative that the system guarantees each tax payer certain basic rights and respect, which are internationally recognised.
In India we follow a system wherein the citizen is enforced upon to pay a certain amount of tax which is higher by a certain percentage over his previous years’ tax payment irrespective of the business cycle or his actual income. This emanates from the pre-conceived notion that everyone evades tax. Where as, in many developed countries it is assumed that you would voluntarily pay the right amount of tax. There are no raids, and searches, and even with a much higher tax rate, the compliance is much higher. The only difference is that if one is caught for tax evasion, then the punishment is certain and severe so that no one would dare do so. In India, the prevailing raid and search encourages more evasion, to get away with pay-out to the enforcement agencies, with the thumb rule of greater the evasion, higher the payout. The compliance is low, so is the collection.
Kitne Khun Maaf Samba – Earlier this year there was news of the highest tax paying bollywood actress’s house being raided by tax officials and the presence of an actor in the odd hours became the ‘masala’. However no one questioned why the tax officials visited the actress at the odd hours to have their operation. It needs to be noted that the person in reference was the highest tax payer in her segment. This only results into the general psyche that paying high tax is a crime in this country discouraging anyone from paying high taxes. We do not have a system of honouring the highest tax payers in India, while the higher the tax payment made, more is the scrutiny with an assumption that he must have evaded more. This is only due to lack of trust that the government has on its citizens. It only encourages people to evade tax and get away with payouts to tax officials inducing corruption in the system.
Having utterly failed over last 64 years, what we need now is a complete overhaul of the structure and a 2nd freedom for the citizens from this imperialistic mindset.
Trust based compliance with strict enforcement in case of any breach of this trust is the need of the hour. This would make the tax system more robust, transparent and vibrant. The call is for freedom from being harassed by the authorities due to the huge discretionary power that they enjoy. Our system entrusts the authorities with excessive discretionary power. We need to ensure dilution of this excessive discretionary power to enable more trust and faith in the system. As a one time exercise, we must also look at an amnesty scheme to clear off all backlogs and post that treat whosoever evades tax with strict enforcement. Trust your citizen, and if he betrays your trust, punishment should be certain and exemplary.
The proposed amnesty scheme may be treated differently from all the previous amnesty schemes, since we did not have the kind of technology and e-governance previously that we have today. Today with the prevalent 360o profiling, we can literally track all transactions and expenditures of any individual, particularly of the high net worth individuals. The amnesty scheme would only help a large section of willing citizens to come clean and honest, who have been living in the muddle of corruption and deceit forced upon by the antediluvian tax system.

Guidelines

•  Presentation to be prepared on the topic : Trust based compliance as against Enforced compliance –
• All presentations would be in power point. No abstracts would be accepted.

• Presentations should be sent at the email id: This e-mail address is being protected from spambots. You need JavaScript enabled to view it. .
  

• Though participants can make the presentation in groups, entry would be allowed only in individual capacity to the panel discussion if selected as a finalist.
• 6 finalists would be selected and they would be asked to join for a panel discussion on the day of the event.
• Last date for submission of the presentations is 26th August 2011 with no extensions.
• We would be however accepting presentations from 1st August 2011 and the judges would be scrutinizing them as and when we receive. The first best 6 entries would be selected for the finals. You are hence requested to send the presentation at the earliest and not wait for the last date. However no entry received after 26th August would not be considered.
• There would be no presentation on the final day of the event. The presentation submitted would be printed in the form of a book and circulated to the audience and the judges.
• The 6 finalists would be asked to join for a panel discussion.
• Each finalist would be allowed to speak for 3 minutes on the summary of his / her presentation.
• There would be an interactive session where each finalist would be asked question by the judges and the audience.
• The first and the second winners would be selected on the basis of the presentation submitted and their participation in the panel discussion – how they answer the questions put forward by the judges and the audience.
• Judges would be doing the marking on the presentation and the performance in panel discussion, which would then be clubbed for the final result.
• There would be no audience marking, however audience participation in asking questions would be highly encouraged.

Deadlines

• Last date for submission of the presentations is 20th August 2011 with no extensions.
• We would be however accepting presentations from 1st August 2011 and the judges would be scrutinizing them as and when we receive. The first best 6 entries would be selected for the finals. You are hence requested to send the presentation at the earliest and not wait for the last date. However no entry received after 26th August would not be considered.
• The final presentation will be on 26th September 2011.

Prizes

• First Prize – Rs. 25 thousand
• Second Prize – Rs.10 thousnd
• Each finalists – Rs. 2 thousand each
• 10 special audience prize for best questions to the panelists – Rs.1 thousand each

Contact Person

• Dhruiti Prayag
  • 09998685025
  • dhruitiprayag.iste@gmail.

• Vishrut Gandhi

• •  09429438623
  • This e-mail address is being protected from spambots. You need JavaScript enabled to view it.