ZIPPING PAST: Economic Survey moots special boarding privileges at airports, fast lane access on roads and toll booths
You may get special boarding privileges at airports, fast lane access on roads and toll booths, special "diplomatic" type lanes at immigration counters or even school, hospitals and airports be named after you.
If you think such privileges are reserved mostly for politicians, it is time to think again.
The Economic Survey suggests the use of people's aspiration for higher social status in order to increase tax compliance. The Survey said the top 10 highest taxpayers within a district can be highlighted and accorded due recognition. The recognition can be in the form of expedited boarding privileges at airports, fast-lane privileges on roads and toll booths, special "diplomatic" type lanes at immigration counters, etc. Further, the highest taxpayers over a decade could be recognised by naming important buildings, monuments, roads, trains, initiatives, schools and universities, hospitals and airports in their name.
INVOKING RELIGION
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- In a deeply religious country such as India, tax compliance can also be increased by reminding people of the 'Doctrine of pious obligation'
- The Survey points out that the repayment of debt in one's own life is prescribed as necessary by scriptures across religions
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"The idea is to create exclusive membership of "clubs" that exude not only social status but also honour. Such steps can also help propagate the social norm that "paying taxes honestly is honourable." the report said.
Buttressing its point, the Survey offers the example of India's military service which employs over 14 lakh personnel – one of the armies in the world. While the economic incentives offered to army personnel are attractive, a large section joins the armed forces because serving in the armed forces is considered honourable. Similarly, in order to enhance tax compliance, behavioural insights need to be employed to modify the social norm from "evading taxes is acceptable" to "paying taxes honestly is honourable."
Further, to correct vertical unfairness that can lead to tax evasion, the government should utilise the behavioural insight that people identify with their neighbourhood, the survey continues. This can be done by signboards showing "tax money at work" in constructions projects in a panchayat/ district explicitly convey to citizens that their tax money is used in valuable public goods, thereby lowering perceptions of vertical unfairness. Similarly, highlighting the tax paid by other taxpayers, especially self-employed individuals, in the panchayat/ district through SMS, billboards, etc, can correct perceptions of horizontal unfairness.
Interestingly, the economic survey is of the view that in a deeply religious country such as India, tax compliance can also be increased by reminding people of the 'Doctrine of pious obligation'. Highlighting the tax obligation in three of the most followed religions in the country – Hinduism, Islam and Christianity; the survey points out that the repayment of debt in one's own life is prescribed as necessary by scriptures across religions. Given the importance of religion in the Indian culture, the principles of behavioural economics need to be combined with this "spiritual/religious norm" to reduce tax evasion and wilful default in the country.
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