As nations economy resolutely moves ahead with the agenda of internationalisation by inviting foreign direct investments and collaborations, colonial taxation system originally excavated from ruins of East India Company demanded extensive reforms urgently. Congress regimes tinkered with policy reforms, duties, levies, cess etc. in the mode of playing Ludo with the nation in every Budget annually. Journey of a well planned tax-reforms in a specified direction began only with installation of a nationalist Government in 2014 only. Lot of ground has already been covered yet several more milestones are yet to be as this journey is ceaseless.
Broad guidelines on how to collect taxes painlessly without bleeding even a drop of taxpayers blood was prescribed in Manusmriti centuries ago. Only if those guidelines had been followed while framing taxation policies post-1947, life of taxpayers might have been much less traumatic. Let us visit those guidelines objectively to ascertain whether our policies can be fine-tuned further –
Mohadraja Svarastram Yaha Karsayatyanaveksaya I
Soacirada Bhrasyate Rajyajjivitacca Sabandhavaha II VII/85 II
King tormenting his Kingdom out of delusion, is ruined along with his kin soon.
King neglecting his responsibilities and obligations caused by any reason whatsoever, is destined to be ruined. Royal obligations are mandatory in nature, cannot be ignored.
Sarirakarsanatpranah Ksiyante Praninam Yatha I
Tatha Rajnamapi Pranah Ksiyante Rastrakarsanat II VII/86 II
By weakening the Kingdom and subject, King is ultimately destroyed just as Prana is reduced by tormenting gross body.
When Prana is reduced and weakened by tormenting physical body over a prolonged period of time, possibility of survival is remote. Similarly, if a King is engaged in tormenting and undermining his subjects, he is duly destroyed in due course of time. King remains strong and safely ensconced in his throne only when his subjects are strengthened and looked after well. Strength of state subjects alone is the real strength of a King.
Krayavikrayamadhvanam Bhaktam Ca Saparivyayam I
Yogaksemam Ca Sampreksya Vanijo Dapayetkaran II VII/99 II
Quantum of collectable tax be decided after evaluating sale and procurement prices, distance traversed, expenses for food, sustenance and securing assets procured and other related ones.
Tax collectables must be acceptable to majority of tax-payers lest that leads to distress and strife.
Yatha Phalena Yujjyet Raja Karta Ca Karmanam I
Tathaveksya Nripo Rastram Kalpayetsatatam Karan II VII/100 II
After due considerations and discussions, King may decide quantum of taxes to collect so as to ensure, King and his subject remain gratified.
Extent of taxation must also leave King satisfied and enable him to govern his Kingdom. Unanimity must be attained between King and subjects over the issue, all are delighted instead of being tormented by the level of taxation imposed.
Yathalpalpamadantyadyam Varyokovatsasatpadah I
Tathalpalpo Grhitavyo Rastradrajnabdikah Karah II VII/101 II
King may collect revenues and taxes as minutely as leech, calf and bees suckle often.
Quantum of taxes levied must be based on a rational formula acceptable to all in such a way that it does not hurt anyone. Rather, taxpayers never ever realise that taxes are being collected from them. In this context, the simile proferred by Maharsi Manu is quite meaningful. Leeches suck blood, calves suckle milk and bees sip flowers so quietly that they do not disrupt anyone or anything and nothing ever appears to have been taken away. Tax collection by King must also be a subtle activity so as to ensure, no one is hurt. Periodicity of taxes to be collected must also be based on convenience of all. Even if frequent at short intervals, it must not hurt anyone.
Pancasadbhaga Adeyo Rajnya Pasuhiranyayoha I
Dhanyanamastomo Bhagaha Sastho Dvadasa Eva Va II VII/102 II
King may claim only fiftieth of animals, gold and sixth, eighth or twelfth share of crops grown.
Underlying principle is that such collections by a King must be reasonable enough not to torment those who earn and submit taxes to Kingdom.
Adaditatha Sadbhagam Drumansamadhusarpisam I
Gandhausadhirasanam Ca Puspamulaphalasya Ca II VII/103 II
And sixth portion of bark, honey, butter, perfumes, medicines, juices, flowers, roots and fruits.
One-sixth of these commodities may be collected by King as tax for various applications.
Patrasakatrinam Ca Carmanam Vaidalasya Ca I
Mrinmayanam Ca Bhandanam Sarvasyasmamayasya Ca II VII/104 II
And sixth portion of tree-leaves, herbs, grass, leather, cane, earthen vessels and stone wares too.
These commodities too, may be taxed by King and same quantum of tax collected. Maharsi Manu was a great visionary. Guidelines of tax collection system laid down by him centuries ago, is still in practice. That affirms, how accurate and authentic he had been with his wisdom of the highest order. Manusmriti used to be held in high esteem transcending several eras of history. These taxes enabled Kings to govern their Kingdoms and secure their subjects.
Yatkincidapi Varsasya Dapayetkarasanjnitam I
Vyavaharena Jivantam Raja Rastreprithagjanam II VII/105 II
Whatever is decided to be collected as tax annually from those who earn through business in the Kingdom, King may realise that.
Nocchinddyadatmano Mulam Paresam Catitrisnayaya I
Ucchindanhyatmano Mulamatmanam Tansca Pidayet II VII/106 II
Excessive greed must not be allowed to disrupt others by striking at their roots as it agonises him and others too.
Excessive acquisition by King inflicts miseries and agonies on subjects of Kingdom. Whatever is to be collected, must be moderate without tormenting anyone.
Tiksnascaiva Mridusca Syatkaryam Viksya Mahipatiha I
Tiksnascaiva Mriduscaiva Raja Bhavati Sammataha II VII/107 II
King capable of being harsh and tender based on ones performance, harsh with wrong and warmly amiable with right, is profoundly adorable.
By being righteous, King commands respect and honour. King has to be discriminatively wise while dealing with various kinds of people in his Kingdom.
If transformed in modern context, these directives ordain, State must approach a taxpayer with the mindset of a seller/marketer of ones products/services. As taxpayer is financiar, rather ‘Annadata’ of the entire State, tax collecter cannot earn his/her monthly emoluments if taxpayer refuses to pay or unable to earn and pay. Hence tax-collecter must collect taxes from tax-payers with maximum courtesy at his/her command. Pensions ought to be tax-free. Taxing pension is an act of financial brutality. An all representative Direct Tax Council must be raised on lines of GST Council to deliberate over quantum of taxes acceptable to all, its periodicity, quantum of penalties for defaulters etc. Documentation and nomenclature pertaining to tax collection must be simplest and smallest possible so much so that even a first-timer is able to complete it confidently without assistance. So must be the website too. Trial runs must be conducted with rookies and novices to ensure, websites and digital forms are not really intimidating. After tax-collection process is completed and returns filed, State must warmly thank tax-payers individually and express a word of gratitude on digital platforms.
With all transactions going digital, taxpayer must be liberated from the responsibility of filing tax-returns. ITRs must be filled in by the Tax Department for every assessee, then emailed for comments/approval and filed on expiry of stipulated period. Tax Deptt. is welcome to levy nominal charges for the service rendered. Tax Education Cells must be managed in every Tax Office to provide guidance, clarifications on every aspect of tax collection business so that tax payers do not have to rush to CAs for that. That every visit to tax offices must be a memorable experience for every tax payer, must be the guideline overseeing entire spectrum of activities of tax departments.