This post has been self-published on Youth Ki Awaaz by neetibiyani. Just like them, anyone can publish on Youth Ki Awaaz.

India’s Striving To Strengthen Its Tax Policy But It’s Still Costing Us Dearly. Here’s Why

NFI logoEditor’s Note: With #GoalPeBol, Youth Ki Awaaz has joined hands with the National Foundation for India to start a conversation around the 17 UN Sustainable Development Goals that the Indian government has undertaken to accomplish by 2030. Let’s collectively advocate for successful and timely fulfilment of the SDGs to ensure a brighter future for our nation.

The progressive realisation of human rights and availability of public services such as education, health, nutrition, drinking water and sanitation, etc. depend on how effectively national governments mobilize resources in the country. An integral part of this is national tax policy. India is an outlier among large developing countries with regard to its low tax-GDP ratio of 17 per cent, with a high dependence on indirect, consumption taxes. Indirect taxes are regressive and indiscriminate in nature, as the rich and the poor pay the same levels of taxes on consumable products, regardless of their income levels and ability to pay tax.

(Source: UNU WIDER)

While progressive and effective national tax policies are vital to raising domestic resources, the secrecy mechanisms of the shadow financial system limit the ability of governments to raise revenue on their own. The result is illicit financial flows – cross-border movement of funds generated through a range of activities – including tax evasion, misappropriation of state assets, laundering proceeds of crime, and artificial profit shifting by multi-national corporations by abuse of tax laws and bilateral tax treaties. Illicit financial flows (also known as black money or dirty money in certain countries), directly aided by secrecy in the global financial system, are deeply corrosive of national revenue, inhibit the realisation of human rights and undermine institutional accountability.

India’s efforts to curb illicit financial flows have been manifold, and the country has enacted several tax transparency measures:

  • Automatic Exchange of Tax and Financial Information between Jurisdictions: Criminals and tax evaders take advantage of a porous financial system. While illicit money can transcend borders with the click of a button, efforts on part of government authorities continue to be constrained by national borders as their jurisdiction extends only to their own country. Existence of tax havens and an efficient industry of tax lawyers and bankers facilitate financial secrecy and enable people to move their assets offshore. The Organisation for Economic Co-operation and Development (OECD) and the G20 have devised the standard for tax authorities to be able to exchange citizens’ tax information with each other automatically. This measure is termed Automatic Exchange of Information, allowing information like names, addresses, tax identification numbers and account balance to be exchanged at regular intervals with the account holder’s country’s government. India joined the standard of Automatic Exchange of Information in 2015 and started exchanging information in 2017. By way of this measure, Indian tax authorities will be able to receive tax information regarding Indian citizens from other countries. Thus, if an Indian citizen has an account in a Swiss bank, and has a balance over a certain threshold, their information will be sent to the Indian tax authorities automatically. This will not only deter tax dodging and crime, but also enable investigations on part of tax authorities.

 

  • Registry of Beneficial Owners (True Human Owners) of Companies: In most countries across the world, company registration laws do not require ownership information. Thus, a company can easily be set up without the real human owner being identified as the one benefitting from her or his company. This results in a spider web of anonymously held companies, enabling embezzlers, arms traffickers and drug dealers to be business owners, without being identified as the ones ultimately controlling or profiting from such companies. The Panama Papers investigations revealed how shell companies were used to supply fuel to the Syrian Air Force, thus financing the deaths of thousands of Syrian civilians; and how a human trafficker used anonymously owned companies to run his racket. Anonymous companies, perfect for hiding ill-gotten money, more often have few employees and do not conduct any real business. In 2016, the United Kingdom became the first country to create a fully public registry of beneficial owners of companies incorporated there, identifying the true human owners of all companies registered in the U.K. Many other countries have signalled their support for public registers of beneficial owners. India has implemented a law for creating a registry of beneficial owners of companies registered in India, in the Companies (Amendment) Act, 2017. This policy measure will ensure that the Registrar of Companies, under the Ministry of Corporate Affairs, will have information about the real human owners of each company set up in India – which will help track down the real humans responsible for any crime or tax abuse.

 

  • Country-by-Country Reporting of Multi-National Corporations’ Operation and Tax Data: There is a lack of clear and transparent information about the operation of MNCs. Currently, MNCs are able to exploit loopholes in domestic and international tax laws to shift their profits from one country to another, often through tax havens, and avoid paying their fair share of taxes in the countries where MNCs have a business presence. This implies that MNCs may be making profits in India, for instance, but could easily shift their profits to a low tax jurisdiction like Hong Kong and justify that transaction as a payment for the use of a patent. Profit shifting is an abusive tax practice that severely impacts the tax base of developing countries. MNCs report on their profits, revenue, taxes paid and number of employees in an aggregate global manner, which does not clarify a corporation’s operations in a specific country. The G20-OECD Base Erosion and Profit Shifting (BEPS) project requires MNCs with an annual consolidated revenue of over €750 million (about Rs. 5,500-6,000 crore) to report information regarding revenue accrued, profits earned, taxes paid, number of employees, assets, etc. in a disaggregated, country-by-country basis. This greatly enables governments across the world to ensure that MNCs operating in their jurisdictions pay their fair share of taxes, and spot irregular information and activity that needs further investigation. India announced the adoption of Country-by-Country Reporting requirements for MNCs in the Union Budget 2016-17. The new documentation regime was applicable from April 1, 2016 with the first filing due by November 30, 2017.

While India is proactive with regard to tax transparency measures, it is also necessary that the country considers comprehensive national tax reforms. As part of India’s commitment to the Sustainable Development Goals, India must strengthen the mobilisation of its domestic resource by gradually increasing its tax-GDP ratio. Greater emphasis should be placed on direct taxes, like personal income tax and corporate income tax, as direct taxes are progressive in nature. India should also introduce other direct taxes such as inheritance tax and estate tax, in order to generate a greater proportion of its taxes from direct taxes and reduce the burden of indirect taxes. India should also invest in increasing the capacity in its tax departments to have effective tax administration, investigation and litigation. This will help finance other Sustainable Development Goals that aim to improve the quality of every living being’s life.

The SDGs are urgent and complex, and need concerted efforts if they are hoped to be achieved. Financing the SDGs is thus crucial, and the battle begins with tax.

 

Featured Image for representational purposes only.

You must be to comment.

More from neetibiyani

Similar Posts

By Twishaa Tandon

By Kalai Selvi

By Shambhavi Saxena

Wondering what to write about?

Here are some topics to get you started

Share your details to download the report.









We promise not to spam or send irrelevant information.

Share your details to download the report.









We promise not to spam or send irrelevant information.

An ambassador and trained facilitator under Eco Femme (a social enterprise working towards menstrual health in south India), Sanjina is also an active member of the MHM Collective- India and Menstrual Health Alliance- India. She has conducted Menstrual Health sessions in multiple government schools adopted by Rotary District 3240 as part of their WinS project in rural Bengal. She has also delivered training of trainers on SRHR, gender, sexuality and Menstruation for Tomorrow’s Foundation, Vikramshila Education Resource Society, Nirdhan trust and Micro Finance, Tollygunj Women In Need, Paint It Red in Kolkata.

Now as an MH Fellow with YKA, she’s expanding her impressive scope of work further by launching a campaign to facilitate the process of ensuring better menstrual health and SRH services for women residing in correctional homes in West Bengal. The campaign will entail an independent study to take stalk of the present conditions of MHM in correctional homes across the state and use its findings to build public support and political will to take the necessary action.

Saurabh has been associated with YKA as a user and has consistently been writing on the issue MHM and its intersectionality with other issues in the society. Now as an MHM Fellow with YKA, he’s launched the Right to Period campaign, which aims to ensure proper execution of MHM guidelines in Delhi’s schools.

The long-term aim of the campaign is to develop an open culture where menstruation is not treated as a taboo. The campaign also seeks to hold the schools accountable for their responsibilities as an important component in the implementation of MHM policies by making adequate sanitation infrastructure and knowledge of MHM available in school premises.

Read more about his campaign.

Harshita is a psychologist and works to support people with mental health issues, particularly adolescents who are survivors of violence. Associated with the Azadi Foundation in UP, Harshita became an MHM Fellow with YKA, with the aim of promoting better menstrual health.

Her campaign #MeriMarzi aims to promote menstrual health and wellness, hygiene and facilities for female sex workers in UP. She says, “Knowledge about natural body processes is a very basic human right. And for individuals whose occupation is providing sexual services, it becomes even more important.”

Meri Marzi aims to ensure sensitised, non-discriminatory health workers for the needs of female sex workers in the Suraksha Clinics under the UPSACS (Uttar Pradesh State AIDS Control Society) program by creating more dialogues and garnering public support for the cause of sex workers’ menstrual rights. The campaign will also ensure interventions with sex workers to clear misconceptions around overall hygiene management to ensure that results flow both ways.

Read more about her campaign.

MH Fellow Sabna comes with significant experience working with a range of development issues. A co-founder of Project Sakhi Saheli, which aims to combat period poverty and break menstrual taboos, Sabna has, in the past, worked on the issue of menstruation in urban slums of Delhi with women and adolescent girls. She and her team also released MenstraBook, with menstrastories and organised Menstra Tlk in the Delhi School of Social Work to create more conversations on menstruation.

With YKA MHM Fellow Vineet, Sabna launched Menstratalk, a campaign that aims to put an end to period poverty and smash menstrual taboos in society. As a start, the campaign aims to begin conversations on menstrual health with five hundred adolescents and youth in Delhi through offline platforms, and through this community mobilise support to create Period Friendly Institutions out of educational institutes in the city.

Read more about her campaign. 

A student from Delhi School of Social work, Vineet is a part of Project Sakhi Saheli, an initiative by the students of Delhi school of Social Work to create awareness on Menstrual Health and combat Period Poverty. Along with MHM Action Fellow Sabna, Vineet launched Menstratalk, a campaign that aims to put an end to period poverty and smash menstrual taboos in society.

As a start, the campaign aims to begin conversations on menstrual health with five hundred adolescents and youth in Delhi through offline platforms, and through this community mobilise support to create Period Friendly Institutions out of educational institutes in the city.

Find out more about the campaign here.

A native of Bhagalpur district – Bihar, Shalini Jha believes in equal rights for all genders and wants to work for a gender-equal and just society. In the past she’s had a year-long association as a community leader with Haiyya: Organise for Action’s Health Over Stigma campaign. She’s pursuing a Master’s in Literature with Ambedkar University, Delhi and as an MHM Fellow with YKA, recently launched ‘Project अल्हड़ (Alharh)’.

She says, “Bihar is ranked the lowest in India’s SDG Index 2019 for India. Hygienic and comfortable menstruation is a basic human right and sustainable development cannot be ensured if menstruators are deprived of their basic rights.” Project अल्हड़ (Alharh) aims to create a robust sensitised community in Bhagalpur to collectively spread awareness, break the taboo, debunk myths and initiate fearless conversations around menstruation. The campaign aims to reach at least 6000 adolescent girls from government and private schools in Baghalpur district in 2020.

Read more about the campaign here.

A psychologist and co-founder of a mental health NGO called Customize Cognition, Ritika forayed into the space of menstrual health and hygiene, sexual and reproductive healthcare and rights and gender equality as an MHM Fellow with YKA. She says, “The experience of working on MHM/SRHR and gender equality has been an enriching and eye-opening experience. I have learned what’s beneath the surface of the issue, be it awareness, lack of resources or disregard for trans men, who also menstruate.”

The Transmen-ses campaign aims to tackle the issue of silence and disregard for trans men’s menstruation needs, by mobilising gender sensitive health professionals and gender neutral restrooms in Lucknow.

Read more about the campaign here.

A Computer Science engineer by education, Nitisha started her career in the corporate sector, before realising she wanted to work in the development and social justice space. Since then, she has worked with Teach For India and Care India and is from the founding batch of Indian School of Development Management (ISDM), a one of its kind organisation creating leaders for the development sector through its experiential learning post graduate program.

As a Youth Ki Awaaz Menstrual Health Fellow, Nitisha has started Let’s Talk Period, a campaign to mobilise young people to switch to sustainable period products. She says, “80 lakh women in Delhi use non-biodegradable sanitary products, generate 3000 tonnes of menstrual waste, that takes 500-800 years to decompose; which in turn contributes to the health issues of all menstruators, increased burden of waste management on the city and harmful living environment for all citizens.

Let’s Talk Period aims to change this by

Find out more about her campaign here.

Share your details to download the report.









We promise not to spam or send irrelevant information.

A former Assistant Secretary with the Ministry of Women and Child Development in West Bengal for three months, Lakshmi Bhavya has been championing the cause of menstrual hygiene in her district. By associating herself with the Lalana Campaign, a holistic menstrual hygiene awareness campaign which is conducted by the Anahat NGO, Lakshmi has been slowly breaking taboos when it comes to periods and menstrual hygiene.

A Gender Rights Activist working with the tribal and marginalized communities in india, Srilekha is a PhD scholar working on understanding body and sexuality among tribal girls, to fill the gaps in research around indigenous women and their stories. Srilekha has worked extensively at the grassroots level with community based organisations, through several advocacy initiatives around Gender, Mental Health, Menstrual Hygiene and Sexual and Reproductive Health Rights (SRHR) for the indigenous in Jharkhand, over the last 6 years.

Srilekha has also contributed to sustainable livelihood projects and legal aid programs for survivors of sex trafficking. She has been conducting research based programs on maternal health, mental health, gender based violence, sex and sexuality. Her interest lies in conducting workshops for young people on life skills, feminism, gender and sexuality, trauma, resilience and interpersonal relationships.

A Guwahati-based college student pursuing her Masters in Tata Institute of Social Sciences, Bidisha started the #BleedwithDignity campaign on the technology platform Change.org, demanding that the Government of Assam install
biodegradable sanitary pad vending machines in all government schools across the state. Her petition on Change.org has already gathered support from over 90000 people and continues to grow.

Bidisha was selected in Change.org’s flagship program ‘She Creates Change’ having run successful online advocacy
campaigns, which were widely recognised. Through the #BleedwithDignity campaign; she organised and celebrated World Menstrual Hygiene Day, 2019 in Guwahati, Assam by hosting a wall mural by collaborating with local organisations. The initiative was widely covered by national and local media, and the mural was later inaugurated by the event’s chief guest Commissioner of Guwahati Municipal Corporation (GMC) Debeswar Malakar, IAS.

Sign up for the Youth Ki Awaaz Prime Ministerial Brief below