New Delhi: The moral code with regard to compliance of tax laws in India needs to be changed, Union Finance Minister Arun Jaitley said on Friday, even as the country moved into the second month of the demonetisation process launched by the government to flush out black money from the system.
“Moral code with regard to compliance of tax laws in India needs to be changed and DRI is moving towards that direction,” said Jaitley said in his address on the founding day celebrations of the Directorate of Revenue Intelligence (DRI).
“Violation of tax laws these days doesn’t cause a sense of guilt among us,” he said.
Referring to the November 8 demonetisation of high-value currency, he said that global studies show that cost of transacting in cash are high for economy and political system.
“Cost of cash transactions is very high..that’s why we are encouraging digital transactions and electronic payments,” Jaitley said.
In this connection, former Supreme Court Justice N. Santosh Hegde on Friday blamed society for “its attitude” behind the growth of corruption.
“Society is the biggest culprit, it is because we have accepted it as a usual norm that corruption has been flourishing. Today we don’t condemn those who indulge in corruption, rather we hail them when they walk out of jail,” Hegde said in his address at the Transparency International India’s national conference here.
“We have enough laws to combat corruption, but no amount of laws will be sufficient unless and until society changes its attitude. More than punishment what is required is societal boycott of those who indulge in corruption,” he added.
Another perspective on tax evasion was provided by American Nobel laureate and economist Paul Krugman during his visit last week, when he said that from his “pessimist” perspective, the roots of the problem of black money were spread deeper and, therefore, difficult to eliminate.
“A relatively low income economy is not going to be a place where much income tax is collected,” he said at an event here.
“In fact, in a lot of advanced countries there are significant levels of tax evasion,” he said.
“Trying to have an OECD (Orgaisation for Economic Cooperation and Development) type tax system in a low income setup is not a very viable proposition,” he added.