Sunday, 4 October 2009


Since time immemorial, tax collection has been the main source of income for the authorities that be. In fact it is the oldest organized system of revenue collection still relevant today as it were in the middle ages, mosaic and Jesuit periods and the most recorded of this practice in the not so recent history is during the Roman empire.

During this period, the empire was so effective that almost nobody managed to evade taxes or as I put it 'escape the hawkish hawk eyed tax collector'. Tax collection was a highly un-noble profession and extremely looked down upon. The same applied to the collectors but the disgruntlement radiated from the taxpayers- the common people- and not the rulers and leaders.

It is not surprising the hate for the practice and the 'practitioner' is still present if not with another zeal. But instead of showing their disgruntlement and un-appeasement by throwing tantrums, they have resolved to a subtle but highly effective approach; tax evasion.

This practice is especially prevalent in developed societies and costs world governments billions of dollars in lost revenue. New ways to crack down on this seemingly 'rationale' vice are being suggested and devised every season but it seems the taxpayer is always one step ahead of the tax collector thus he/she has an unfair advantage.

But what exactly leads people to evade taxes either by falsifying documents or transferring their assets to tax havens? Well, the reasons are simple enough. Not only are taxes charged on almost every consumer item- in form of VAT- but they don't come cheap either.

A good example is our own country which has some of the toughest tax regimes in the continent. And whether the tax one pays translates into social and economic development in one's community or doesn't, it's common human behaviour (read greed) to pay up as little as possible and retain a s much as possible.

Most modern taxation systems are also grossly flawed and mostly dismissed as favouring the rich. A case in study is the flat rate taxation system as that applied in VAT. Though system is easier to install, monitor and implement, in common sense terms, it's not fair for some rich man in the city and some poor old lady in the country to pay the same taxes on a consumer item.

The rich man has to pay up more since he can afford it and the old lady less thus a balance is struck and the tax man is happy, with a clear conscious.

Uniform tax reduction also benefits the Fat Cats more than the intended target-the poor and start-ups- since the bigger you are, the more you pay consequently the more you will save when tax is reduced.
There's a common adage which goes, 'there are two sure things in life; death and taxation,' I couldn't agree more. Instead of government finding ways to waiver taxes on services, products and properties,they are always busy finding ways in implementing the contrary.

Everything these days is charged;from recent introduction of eighteen wheelers (commercial trucks) toll charges in Germany's autobahns(highways) to recent adoption of VAT charges by the Indian government. It's hard to believe this concept is very new and alien to the Indian populace. Most of them had no idea what VAT-Vat as they they pronounce it – was something the rest of us had become so accustomed to and mostly taken for granted, with VAT charged from the airtime we use to the tissue roll we misuse.

So it should not come as a surprise to hear that people will be having sleepless nights and heart attacks when the tax man comes knocking. Their 'miscalculations' haunts them.
But after all is said and done, taxation can best be summarized as a cost sharing mechanism, kind of an altruistic inclination whereby the 'haves' have a moral duty and obligation towards the 'have nots' which only serves to show the reasons underlying the policies of uniform wealth redistribution.
Copyright© 2006 newsync

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