Wednesday, May 01, 2013

What to do when you are “in doubt”? President gives tips to IRS probationers

IRS trainees during a cultural event at Nagpur Academy (File Photo)
IT WAS a gathering of probationers belonging to Indian Revenue Service (Income-Tax) at Nagpur’s National Academy of Direct Taxes. President of India Pranab Mukherjee asked those future taxmen to apply a test whenever they are “in doubt”, or when the “self becomes too much” with oneself. Here is what Mukherjee said on Monday:
“Whenever you are in doubt, or when the self becomes too much with you, apply the following test. Recall the face of the poorest and the weakest man [woman] whom you may have seen, and ask yourself, if the step you contemplate is going to be of any use to him [her]. Will he [she] gain anything by it? Will it restore him [her] to a control over his [her] own life and destiny? In other words, will it lead to swaraj [freedom] for the hungry and spiritually starving millions? Then you will find your doubts and yourself melt away.”  President Mukherjee who supported the taxmen’s cause during his tenure as finance minister, in fact quoted that Mahatma Gandhi’s Talisman.
Incidentally, none of those IRS probationers was born when Mukherjee was a minister of state for finance in 1970s. Mukherjee reminded the young taxmen that “tax collection is neither a simple nor popular task”. He said: “Many empires have collapsed in the past because Governments did not have money to pay their soldiers. Kautilya’s words ‘Kosh Moolo Dandah’ i.e. “revenue is the backbone of administration” continues to be as relevant today as it was thousands of years ago.”
He further reminded the probationers that taxation now is more a complex phenomenon with political, legal and international ramifications. “The inter-group transactions offer an opportunity for multinational enterprises to locate their profits in favourable tax jurisdictions with low taxes or no taxes. Issues like Transfer Pricing are also very complicated… Earlier, countries were very reluctant to share information. One of the indirect benefits of the 2008 financial crisis was that recalcitrant countries have been compelled to share information,” Mukherjee said.
The government of late has emphasized more on direct tax collection as it's not inflationary unlike indirect tax. The target for direct tax collection for the year 2013-14 is estimated to be whopping Rs 6 lakh 68 thousand crore. And these young officers will play a role in it.

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