This
book is not for every one. This is for those who want to live in a civilized
state. The book is not aimed to proselytize for a tax state. Nor it advocates a
tax haven. And least about a prospective tax-free heaven. It only tries to answer certain mundane but
frequently asked questions: Why pay taxes? What prompts people to hate
taxes? What happens if not paid? How to
make the payment less painful? Is
paying taxes, a matter of money or matter of mind?
Observing people and their behaviour and understanding the patterns that
shape their decisions were of immense interest to me since early in my life. I
tried to comprehend and appreciate the principles of and practices in natural
sciences, where individuals and their environment were dissected to understand
their inherent properties, composition and factors of sustenance. Even while
engaging in experiments in the chemistry lab, I was puzzled at the rationale of
duality created in knowledge as natural sciences and social sciences. Is
natural science really ‘natural’? Does social science has more to do with
nature than ‘social’? Natural science had lost its naturalness the moment man
started acting on it. I found that the distinction between both the sciences
were increasingly getting blurred. As most of the changes happening in the
world are due to human interventions,
one needs a social science perspective to understand them. It was thus clear to
me that, to understand an event or a situation one has to know the people
behind it. And in order to understand people, one needs to understand their
attitudinal and behavioural patterns and the forms relationships take in an
interactive environment.
The above paradigm switch in my thought process might be an important
factor that propelled me to turn to the study of social sciences. The decade
long training and reading in social sciences were indeed stimulating. The
opportunities to learn the finer theoretical and methodological themes that
dominated the intelligentsia in different periods of history and different
cultural contexts have enriched my understanding. I sincerely wished to be an
arm chair academician at this point of time.
Gradually I realized that it is easy to dissect individuals and groups
in the cozy libraries, seminar halls and project reports. It is not that
comfortable to face people as they grapple with issues and challenges that
emerge day by day. That is what I found when I joined the Indian civil
services. My job as a taxman was not without challenges. I was seriously
involved in the exercise of deepening of tax base, presuming that figures
scribbled in the returns represented just a portion of the actual. But within a few years I realized that
the tax potentiality lies not in the microscopic minority within but the vast
majority outside the system. The road to widening the taxpayer base can never
be smooth unless there is appropriate policy intervention, infrastructural
transformation and effective service delivery. The efforts of the government in
this regard started bearing fruits with every little step in the right
direction. But, it was not clear why a country with considerable tax elasticity
and tax potentiality found it difficult to attract more people to its tax rolls
and gain more money to the direct taxes kitty.
I started my search for the answers several years back. Slowly I realized
the need for a systematic macro analysis of the issues. I was in fact plunging
myself to what many call ‘research’ on the subject. Is tax aversion unique to
some countries? My analysis proved not. There are several historical, political
and sociological factors that deter people from paying taxes globally. It is
not just economic factors that determine tax compliance as it is widely thought
off. Attempt in this book was to analyze those factors. Theoretical analyses
given in the book were aimed to provide an understanding of the subject of tax
compliance with a global perspective at the macro level. It threw open certain
valid questions. Why people in some countries comply better than others? Why
tax evasion is not frowned upon in some countries and disgraceful in some other
countries?
Any theoretical analysis on the behaviour of people is incomplete
without analysis of primary data. Any statistical analysis based on secondary
data cannot translate finer emotional and sociological facts in the realm of
individuals and groups. An empirical analysis is imperative if one has to
understand the why and how of tax non-compliance. A scientific analysis of the
attitudes and perceptions of a sample of taxpayers can provide valuable
insights into not only issues such as tax compliance and honesty at the
personal level but also about interconnected social traits such as trust,
reciprocity and altruism at the societal level. A sample from a developing
country like India
A unique attempt was also made here to understand tax evasion and tax
enforcement through a study of tax evaders (or who were branded so) themselves.
As a researcher, I was really surprised at the frank and genuine responses of
the sample of tax payers who were searched by the Indian Income Tax Department.
The interviews and case studies with them have, without exception, cumulatively
and intellectually enriched me as they helped me to understand the behavioural
pattern, attitudes, perceptions and expectations of taxpayers in general.
It would be bliss if one can get rid of all taxes. But in a world of
widespread inequity and inequality, income taxation is an economic-sociological
instrument for overall well being of the people. Countries like India
Please
take note of this disclaimer. All views expressed in this book are my personal
views. The book is not from a taxman or a civil servant but from a social
researcher. The sole aim of the book is
to provide a new analytical framework in the study of and approach towards tax
evasion and tax enforcement.
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