During his poll campaign in January 2014 Narendra Modi talked of “tax terrorism” and advised tax officials, “You cannot treat every citizen like a thief”. Two and a half years down the line he is still offering almost the same advice to the tax administrators: “People within the country are not dishonest… but somewhere they have some problem” in paying taxes. It is time to go beyond the talking point and do something meaningful. The Prime Minister may be reminded of his own smart saying: “We need action, not Acts”. On black money, Modi has remained silent. It takes courage to admit failure. For black money holders within the country and outside, the government has proposed two amnesty schemes. Tax evaders have been invited to declare their illegal income and assets, pay a small price and turn their black money into white legally with no questions asked. Even though morally offensive to the honest taxpayers, these schemes have not tempted many to come forward and take the bait. And this is what Prime Minister Modi tells the tax administrators: “If you become taxpayer friendly, then taxes will automatically come to you”. The fear of the law and stiffer penalties, and not such homilies, yield the desired results. It is an established fact that the lower the tax rate, the higher the compliance. This government has neither simplified taxes nor lowered them. Even when global oil prices plunged, the benefit was not given to consumers; it actually raised taxes to fill its own coffers. Modi’s big dreams are being funded, not by downsizing government, not by a crackdown on black money, but by raising taxes, which is the easiest doable thing.   The competitive pursuit of appeasement politics has raised the burden on the existing taxpayers, whose number is small. Data shows only 1% of the population pays income tax. Only five crore people pay taxes and Modi wants their number to double. Surely, neither hare-brained schemes nor verbal exhortations would do. For that, the tax system needs to be reworked along with a technology push and simple, transparent rules. http://www.tribuneindia.com/news/editorials/simplify-lower-taxes/253137.html