Taxing the citizen

While a proforma protest and a strike should be expected from officials whose clout will diminish with avenues for moneymaking and harassment closed, apart from fears of some being rendered redundant, if they think they can get away with such protests the Union government will have no one to blame but itself. Look at the way the finance ministry succumbed to the blackmail tactics of traders in Delhi who objected to value-added taxation. The delay in VAT implementation, even when many state governments were willing to go ahead, was largely on account of the tentativeness with which the Union finance ministry approached this initiative in tax reform.

Given this background, IT officials seem to think that they can browbeat the minister and his government and get the proposed reform rolled back. However, here the IT officials are on a weak wicket since they are pitted against the vast majority of tax payers who would like to see a simpler, more efficient and transparent system of tax administration. The outsourcing proposal is a part of the Kelkar committee recommendations and one of the few ideas that received wholesome public support. The sooner the government implements this proposal the better.