Question

Should the tax system serve the public interest?

Answer 1

The taxation system should definitely serve the public interest. It can be in following ways:

• Equality: Tax payers earning higher income shall pay taxes at higher rates. Tax payers earning lesser income shall pay taxes at lower rates. Thus tax rates should be progressively planned in proportion to the income levels. Secondly, tax payers who enjoy similar conditions to earn income should be taxes in similar manner.
• Clear and definite: The tax laws should not have any ambiguity within it. It should be clearly stated and interpreted in same way by everybody. The rates, methods of computation and provision should be very obviously stated.
• Payment: With developing technologies in payments, the taxation should make it convenient for taxpayer to pay the taxes easily. For this the departments can have options in mode of payments viz online or offline. Also installing system of real-time credit, safety and security is prime importance.
• Information Protection: No information reported to tax administration shall be disclosed unless required by any law. Hence, proper controls to protect unauthorized access or changes to information should be installed.
• Tax differences: The laws have to be liberal and provisions must not altogether penalise the taxpayer in case taxes owed is higher than taxes voluntarily paid by him/her. Proper communication of balance tax payable with sufficient time and method should be made to the. by the tax authority.
• Not hinder production and growth: Tax administration shall not adversely impede economic growth levels and production and collect taxes. Hence, provisions for losses, expenses and deductions towards investments, exemptions should be offered to them.
• Pellucidity in administration: Tax payer should be made known who accounts for the tax they pay, where it goes and how is it utilized. Also how the administration works, the hierarchy and how the proceedings flow.