Amnesty For Evaders

Thus, under the new dispensation which is to prevail till December 31, people who have willfully omitted paying taxes can now come forward pay up and be taxed at the maximum same rate as those who have been paying up dutifully. No questions will be asked as to the source of the funds. Nor will there be any penalties. And as a further sweetener, they will enjoy immunity from the income tax and wealth tax acts, not to mention Fera.

Crooks have never had it so good and the honest can be forgiven for wondering if it is worth being honest. After all, if the government is going to come up with such schemes every now and then, the rational thing to do is to wait for one instead of being a good citizen and paying up. The signal that Mr Chidambaram has sent is therefore perverse.

This does not mean that there must not be voluntary disclosure schemes. Practical considerations often require governments to look the other way while the crooks genuflect before the altar. This is especially so in tax matters. (But few countries announce tax amnesty schemes as often as India does. There have been three such schemes in the last 16 years). There is no reason why they should be treated as the children of favoured gods. The least that Mr Chidambaram could have done, therefore, was to have charged tax to the evaders at a higher rate. Even 35 per cent would have done. By charging them at the same maximum rate of 30 per cent, he has removed the distinction between the good guys and the bad guys and this must rank as one of the few black spots on his Budget. It is no consolation to the honest taxpayer that the money so garnered will be spent on basic minimum services. Nor is it much use asking the state governments to co-operate in attracting people to avail of this new opportunity to those who had

shied away from paying their legitimate taxes. True, the states will get 77.5 per cent of the funds so collected but the job of collecting income tax is the Centres alone and most states may well decide that the money they eventually receive is not worth the bother.