Events : Politics & Governance

Talk on "Direct Taxes as an Engine of Social Transformation" by Ms. Jahanzeb Akhtar

Held on Tuesday, 17th July, 2012 at 6:30 pm.

Dr. A very lively and interesting talk was arranged by Bangalore International Centre on Tuesday, 17th July, 2012 at 6:30 pm. The talk was on “Direct Taxes as an Engine of Social Transformation” by Ms. Jahanzeb Akhtar, Commissioner of Income Tax, Bangalore. It was moderated by Dr. Vinod Vyasulu, Adviser, Centre for Budget and Policy Studies.

In a lucid and easy-flowing talk, Jahanzeb outlined how the direct taxes are basically the tool of the government to build social and real infrastructure, implement welfare policies and trigger several socio-economic activities. Dealing with the evolution and structure of direct taxes, she readily admitted the lopsided approach taken after independence when equity was sought to be achieved through an extraordinarily high rate of taxation at the top-level which reached 97.75% around 1970s. There was a clear disincentive to work under such a structure. Fortunately, thinkings have changed over the years and the current maximum rate of taxation is pegged at 30%. Jahanzeb dwelt with the various exemption clauses under the Income Tax Act which aim at social transformation through regional balance (Sections 80 HH, 80 HHA, 80 HHBA, 80 IE, 80 P) and noted with regret that these provisions have either been inappropriately used or have had a limited impact. The impact analyses done on other exemption clauses dealing with social transformation through philanthropy [Sections 11, 12, 13, and Section 10 (23 C)] have also supported identical conclusions. Her conclusion about the exemption clauses associated with transformation through scientific research [Section 35 (1) read with Section 43 (4)/ Section 80 GGA] was that the utilization was inadequate in comparison to many other developed and developing countries. She analysed the utilization of several other exemption clauses dealing with environmental protection, schemes for national development, export promotion, software, infrastructure etc to highlight the fact that the potentials have not been fully utilized and that there have been misuses galore. Her suggestion was that the tax-paying citizens should be more honest and engage sincerely with the governmental efforts to ensure that the purposes for which the taxes are levied (and exemptions claimed) are fulfilled in a substantial manner. Simultaneously, she agreed that, the administration of tax and the conduct of the officials would need to be more transparent and more humane. The interactive session which followed the talk elicited several clarifications and elucidation from Jahanzeb. The session was adroitly moderated by Dr Vinod Vyasulu.