“There is a serious need for a relook at the taxation structure and the taxation system in general,” Satish K. Agnihotri, Acting Chief Justice of the Madras High Court, said on Saturday.
“Today, the general view is that most of the taxpayers’ money is being wasted on ostentatious governmental functions and celebrations. The taxpayer would find that after years of honest and hard work, he is left without any means of providing for his old age or family. The result is tax evasion,” the Judge said.
He was addressing a two-day National Tax Conference on ‘Taxation-Modern Perspectives and Challenges,’ organised here by the All India Federation of Tax Practitioners in association with five other organisations.
After presenting a glimpse of the taxation system which was simple and most ideal when kings ruled different parts of the country, he said the tax structure now hardly satisfied any taxpayer.
There was a contrast between the government’s attitudes in the ancient days when every pie of the revenue collected was spent for the public. At present, it looks like everything was being taxed.
For most people, taxes were a burden that were deemed necessary to a certain extent, but most believed that there should be a point in time when the government should stop adding tax to an already overtaxed population, he said.
Inaugurating the conference, C. Nagappan, a Supreme Court Judge, said a country’s taxation system should also consider the level of trust between the people and the government.
The best tax system for any country reflected its economic structure, capacity to administer taxes, public service needs, and its access to other sources of revenue.
In addition, it must also take into account certain important factors such as ‘tax morale,’ ‘tax culture,’ and, perhaps above all, the level of trust existing between the people and the government.
“It must be borne in mind that the trust of people would be best kept if the system of taxation provided is consistent, transparent and dependable.”
S. Gurumurthi, chartered accountant and Corporate Adviser, said there was a need for an overview as to how much Indianness was there in tax laws. The laws should be reoriented, and they should be consistent with social moorings, he said.
