Corruption in Income Tax - startling facts!

By Vijay Kumar

A survey by the Centre For Media Studies, on the Income Tax Department revealed that

++ 46% visited the department a minimum of 4 times.

++ 20.4% of those who interacted with the department had paid bribe.

++ 62% of those who visited felt that corruption had increased.

++ Corruption in high income states is higher than in low income states.

++ 47% of bribes were paid directly to IT staff; 28% through CAs and 15% through agents and touts.

++ 37% returned because of non-availability of concerned staff.

++ 41% complained of tedious paperwork.

++ Information has not percolated down, resulting in confusion, anxiety and lack of awareness amongst tax payers, increasing their dependence on external sources.

++ 67% respondents interacting with the department felt that officials were corrupt.

++ Despite setting up a Complaint Redressal Helpline, computerization of records and centralization of refund dispatch, 40% people felt that corruption persists.

++ 39% respondents felt that the department lacked seriousness/commitment to fight corruption; 22% found them indifferent; 23% felt things were changing gradually and committed levels were going up.

++ 35% found service quality of officials abysmally low; 36% felt it was good; 29% were indifferent.

++ 23% respondents from low income states experienced corruption every time they visited the department while 10% in high income states did so.

++ Taxpayers can either go in for a long/tedious process or take the alternate route of paying bribe and getting the job done faster. 30% used the ‘alternate’ route.

++ 55% paid bribe for filing returns, getting PAN card, IT refund, seeking benefits (under assessment, reduction in penalty, closure of scrutiny).

The Department’s case:

1. People wake up at the last moment to file returns.

2. Resultantly workload 15 days prior to last date increases manifold.

3. CAs, touts and agents collect money from clients in the guise of bribes and tarnish image of the department.

4. Tax payer’s desire to minimize tax liability/burden or to cover lapses creates a pervasive corruption culture.

The Survey came with some Recommendations

1. Reduce repeated visits to the department by developing alternative channels (banks/post offices/Internet) for collecting returns;

2. Use call center network to provide information on procedures, queries, tax refunds and have comprehensive website with regular updates on information, status of refunds and FAQs.

3. Process returns in chronological order on first-come-first-serve basis as per return receipt numbers.

4. Scrutinize taxpayers by transparent norms (computer software to highlight cases).

5. Educate taxpayers (seminars, training programmes, open house discussions) and employers must train new recruits on IT procedures.

6. Each tax office to have government appointed advocates who resolve issues.

7. IT employees should be suitably trained, motivated, rewarded and empowered.

8. Strict action against defaulting employees should serve as a deterrent.

9. Aspire for having a world class taxpayer system.

10. Establish a tax culture which is based on trust and where taxes are paid willingly.

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