Thursday, February 06, 2014

Random Thoughts - IX_b

It's IT returns time and as usual the topic again comes into discussion. Some of the typical excuses that people give for trying to evade or pay less taxes are;
- Government eats up the money
- See the facilities that I have received. Bad roads, bad roads...

I wonder what percentage of tax money is lost to corruption. I don't have exact numbers. I'm thinking anything between 3 to 20% based on these two articles.

Now taking the worst case scenario, let's say in India we are losing 20% of our tax money to the corrupt officials. So, there are two observations that could be made.

1. Considering the fact 80% of the money is spent on developmental activities but even then it doesn't feel that way with the state of things on the ground, the money collected through taxes and money spent are very low for a country like India. I suppose higher proportion of allotment would have resulted in same percentage of loss to corruption but an effective higher amount for a project.

Only 2.7% of the population pay taxes (direct) and which make up 18-20% of total tax revenue. So possibilities are many. 

2. Considering still 80% of the money goes into developmental activities, individuals can still take heart that not everything is being wasted. The sense of victimhood that they exhibit is a mask or rationalization of their own corrupt self. I mean this point is very obvious without the data but somehow they feel that their passionate defence with raised voice and scandalized tone absolve them off their sins. But I still feel these hypocrites are better than honest corrupts.

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