The Hindu Business Line : Missing planes and tanks

A story dated February 10 on www.sitnews.us by Lisa Zagaroli of McClatchy Newspapers is about Pentagon's bookkeeping problems. According to estimates from the Government Accountability Office (GAO), "accounting problems would cost taxpayers $13 billion in 2005." There have been reports of how "ineffective accounting systems have lost track of planes and tanks, left wounded soldiers without pay, and stranded troops without everything from meals and water to tires and generators."

Root of the problem is the `stovepiped' set-up, writes Zagaroli. The agency has `a tangle of 4,150 different business operations' — a labyrinth of `arcane and incompatible accounting systems'.

Add to that the sheer volume. For example, the DoD (Department of Defence) has "at least 5.2 million inventory items, compared with 11,000 at Wal-Mart or 50,000 at Home Depot stores," according to a quote cited in the story. It seems the agency's books are "such a mess that its accountants have stopped wasting money trying to audit them"! "If this were a public company, it would have gone belly up before World War II," is a quote that AccountingWeb mentions in a story on the same topic. "It's not that DoD flunks audits, it's that DoD's books cannot be audited." Want to give it a shot?

If tax returns vanished!

In Australia, if income-tax returns were abolished, the economy would save "$3 billion in lost productivity and give most people the equivalent of an extra public holiday a year". Thus reports www.theaustralian.news.com.au, citing Andrew Leigh, an economist. Administrative burden is a deadweight cost of taxation, says Leigh.

He is aghast that Down Under the cost of tax compliance is $300 per person, and that taxpayers spend 8.5 hours a year on tax affairs. "Instead of cutting tax rates for the rich, we should focus on making the tax system simpler for ordinary Australians," argues Leigh.

Music tax

In Switzerland, "the Federal Court has suspended the introduction of a controversial tax on digital music players, which was due to come into force on March 1," says www.swissinfo.org in a posting dated February 23 by Adam Beaumont. To the Swiss Association for Information, Communications and Organization Technology (Swico), the industry body, the verdict sounds good. For, tax had been proposed on three different product categories, viz. "digital music players with flash memory (MP3s); hard drive-based music players (iPods); and audio/video recorders with a built-in hard drive." Music to the taxman's ears, isn't it?

D. Murali