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Reforming Indian Income Tax Enforcement

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Author Info
Arindam Das-Gupta
Dilip Mookherjee

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Abstract

The purpose of this paper is to document and trace the causes of the poor and declining revenue performance of the income tax in India and to suggest measures for improvement based on a review of international experience. The paper starts by reviewing evidence that the performance of the income tax in India has been poor compared with other countries with similar per capita GDP. Furthermore the performance has a negative secular trend. It is then argued that this is due to low or falling compliance rather than other handicaps. This can. in turn. be traced to ineffective administration due to a reliance on enforcement tools with limited potential, inappropriate organizational structures, lack of computerization and inefficient allocation of limited manpower resources coupled with a growing taxpayer population.

International experience in administrative reform is reviewed paying particular attention to Mexico. the Philippines. Singapore and Spain and the process of computerization that has taken place in many CIAT countries, particular attention is paid to information system reform. organizational restructuring and auditing in order to derive appropriate policy lessons for India.

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Publisher Info
Paper provided by Boston University, Institute for Economic Development in its series Boston University - Institute for Economic Development with number 52.

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Date of creation: Apr 1995
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Handle: RePEc:fth:bosecd:52

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  1. Benno Torgler, 2005. "Tax morale in Latin America," Public Choice, Springer, vol. 122(1), pages 133-157, January. [Downloadable!] (restricted)
  2. Benno Torgler, 2004. "Tax Morale in Asian Countries," CREMA Working Paper Series 2004-02, Center for Research in Economics, Management and the Arts (CREMA). [Downloadable!]
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This page was last updated on 2009-11-20.


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