Less is more

| Updated: October 24, 2017 22:16:55

Less is more

There's little new about the fact that revenue earnings rarely meet targets. Essentially these are stretch targets that modern management suggest be rewarded appropriately. But there is a thin line between targets and reality. Tax officials inevitably groan when they see the numbers, shrug their shoulders and get back to work. Because unlike private organisations there's no penalty for not achieving targets. Businesses have long dispensed with the concept of automatic increments and replaced even inflationary adjustment of wages with performance-based incentives. Among the more thinking senior managers this raises its own issues. In a large organisation it is both difficult and time-consuming to align individual objectives with that of the organisation. And for the juniors, it becomes increasingly difficult to find a link with objectives and their raison d'etre or job description. Unfortunately the government's don't yet function like that, though a move has begun to set yearly objectives. It would seem that traditional concepts of the smiling Finance Minister setting 'deliver or else' targets to grim-faced tax officials don't work anymore; that the proverbial lemon can't be squeezed any further. One has to sympathise with the Finance Minister in that the demands of the government are ambitious and everyone who meets him in the lead-up to the annual black briefcase exercise wants taxes cut.
The economists have their suggestions, some of which difficult to comprehend from the common man's perspective. A recent one has been uniform taxation percentages for cigarettes and bidis. This defies reason and reality. Cigarettes are more expensive than ever and there's little to suggest consumption overall has reduced. Increasing taxes on bidis and cheaper cigarettes will be a difficult if not impossible task. If consumption does reduce, a big 'if', the bidi industry and workers are out of work -not a nice prospect. Economic theory suggests if spending on smoking goes down it will be channelled into other economic activity. The examples don't support it. Advertising bans and smoking restrictions have reduced the cost of the manufacturers of cigarettes. Bidis and cheaper cigarettes never had much spend to begin with.
Another proposal that is often suggested but never listened to is the idea of allowing undisclosed earning investments in the real estate sector. This too has been tried for a number of years and hasn't delivered much. So when the FBCCI starts campaigning for unbridled investments in the sector, without question it spanks of unfairness. This is akin to slapping the honest taxpayer and laughing on the way to apartments. The taxpayer is groaning under the burden of taxes and unwritten, undocumented taxation and rent-seeking and such a move is frankly an affront. The real estate sector sent the market into a tizzy with abnormal hikes in land and apartment prices and now are frying in their own oil. And if others are to get an unfair advantage, then some measures should be in place for those who have paid taxes. Policies cannot and should not differentiate between citizens. And such moves don't help tax generation and collection, it works against it. The solution is realistic taxation and processes that take out the discretionary element and generates volumes.
(The writer may be reached at [email protected])

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