One may argue that developed nations have higher tax rates than India. Australia, Canada, USA, all have very high tax rates. The tax payers money is of course used to provide world class amenities to the 'tax payers'. In some Scandinavian nations, progressive taxation is very severe. So you really pay the price for being rich. But... in return 'you' get the best infrastructure, power, water, the best public schools, the best healthcare, and numerous social security benefits. For example, Canada...if you are ill you can just visit a govt. hospital and be assured of world class treatment. In USA, the public schools are generally better than the private schoals!
In our nation, the middle class, as I mentioned earlier, exists only to pay tax. You will be shocked to know that just about 2% of our nation pays income tax. Another major difference is that we pay tax so that the government has money to feed the poor. We pay tax so that farmer loans can be waived. We pay tax so that farmers get free power. We pay tax so that poor people get rice at Re.2 a kg. We pay tax so that diesel is subsidized. We pay tax so that the poor children can study at government schools. We pay tax so that the slum dwellers get free electricity and water. We pay tax so that they get rehabilitated in SRA buildings, which they rent out and continue staying where they were. I am not against the poor getting sops, but doesn't mean that we only earn and pay for them.
The biggest joke...tax evasion...has never even been mentioned by any political party in their agenda. There is such massive tax evasion in this country, that a little bit of effort will result in huge revenue generation. Octroi, sales tax, VAT are failures. Octroi was supposed to be abolished, with the introduction of VAT...but now the govt. is reaping double benefits. The octroi checknakas, are corruption nakas for me. There is corruption in all the aspects one can think about at an octroi naka. From weighing the trucks to declaring the value of goods, its all theft. Try getting a truck past an octroi post, and you'll be hunted down by cops in minutes. Why is that I never see a cop chase a traffic offender?
Sales tax and VAT...issues which pain me. Sales tax and VAT are to be borne by the seller. He is selling something...so he bears a 'sales tax'...similarly with VAT. Instead they just pass it on to the consumer...and conveniently mention...price-so and so + so and so % tax. Its your tax god damn it. Apart from that, I don't know if even 1% of all sales transactions that occur in India are properly documented i.e. issue an invoice or a cash memo that can be accounted for by the taxation authorities. How many times to you buy something and the seller proactively gives you a cash memo. The corruption is so deep rooted, that if you insist for a bill, he will give you an estimate. Most 'aware' people are satisfied with that, but don't realize that the estimate again is not accounted for. A bill book must be numbered, and one copy of the memo will be retained by the shop keeper. I wonder if all sellers even have bill books with them.
One more crappy tax that was levied...to kill the middle class community further was the service tax. The most ridiculous thing I have ever heard. I pay tax on my income...TDS...etc. (refunds never come back) and I am taxed for paying my electricity bill! I go to a restaurant to eat my food...using my 33% taxed income...and they charge me a service tax on it? The businesses shamelessly levy it on the buyer! Ok...you want us to pay for it...so include it your food costs...and charge us accordingly. Its NOT my tax..its yours.
Tell me something...how many doctors pay tax? How can their income be accounted for...the private practitioners? There is no billing mechanism. Transactions are in cash. If you want a bill, it is just a written note on a precription...that again cannot be accounted for. I don't think any private practitioner pays complete income tax. What are the tax authorities doing? Nothing...they are aware of this for decades...they still don't have a mechanism to monitor their income.
I buy petrol...it is taxed...I buy food it is taxed...I buy rail tickets...there is a service charge...I use a phone...it is taxed...and I pay for all this with my taxed income....and 98% of India doesn't pay income tax. Sales Tax, VAT, Service Tax are anyway borne by the 2% who use it!
Born free...taxed to death...
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