Financial Daily from THE HINDU group of publications
Thursday, Apr 03, 2003
Financial Daily from THE HINDU group of publications Thursday, Apr 03, 2003 |
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Industry & Economy
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Taxation Columns - Say Cheek Awake when VAT is asleep D. Murali
NOW that VAT has gone into hibernation, there is a sudden loss of steam in the VAT-baiting lobby. But there are those lay people on the sidewalk who want to catch up with what has happened, and why what has not happened has not happened. They are the ones who are awake even when VAT is asleep, and they are asking questions. Why is VAT not awake yet? They put up all the make-up on Jaswant to play the prince's part to wake up the sleeping VAT beauty, but there are all those goons who are standing between him and the big V. Now that VAT is out of the radar screen... Okay, you want to know if you can forget about it and go about life as if VAT didn't exist. That would be a mistake because it would surface again, so be ready for all the whipping up of feverish VAT-talk in seminars and on TV a few months from now. What is VAT like? Some say, it is the new animal in the taxpayer world, ready to pounce and eat off flesh from the skinny chaps that they are. Looking at it from a 'Bush' angle, it is like the stubborn Saddam refusing to surface. But those in Government circles look at VAT as a shy and unwilling bridegroom. VAT rhymes with what? If you are not asking what our VAT law is modelled on, a simple answer for the query would be bat, cat, fat, hat, mat, pat, rat, sat and tat. Also, brat, chat, flat, spat and stat. Are we going to live happily ever after, after VAT? Too optimistic, because no tax is ever meant to cheer you up, except zero tax. But VAT can cause more fiction to be created. To rephrase what Will Rogers once said — that "The income tax has made liars out of more Americans than golf" — VAT may make liars out of more traders than sales tax. As consumers, you may be caught between an astute seller and a complicated law. Will there be a value-added taxman? New brooms sweep well, and new taxes could have friendly administrators. But that is only as long as they don't understand the loopholes where they can buttonhole you in. To expect VAT to result in a value-added administration would be as naïve as to fondly wish that newly-laid roads would bid goodbye to potholes forever. Too many players are involved and the States have their own interests to protect. So, to be realistic, it could be a matter of time before VAT follows the old rut of taxation and degenerates into an opaque, "suspicion-ridden, harassment generating, coercion-inclined regime", to borrow a few words from Jaswant.
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