GOANS are generally perceived as honest and law abiding, but this image appears to have taken a beating with income tax authorities pointing out that many Goans in the income brackets requiring assessment do not file returns and evade taxes. Some idea of evasion was available to the IT officials when they detected undisclosed income of over Rs 158 crore in 2017-18. The detection was done through spot surveys and checks conducted in different localities. In all, 158 surveys were carried out, which revealed that apart from individual assesses, shack owners, fish traders and builders were principal groups of evaders among businesses. Many Goans were neither paying income tax nor capital gains tax on income from sale of properties. Goa’s chief income tax commissioner Usha Nair feels that many assessees in Goa take it for granted that if the business is not doing well they do not need to pay tax, even though their income is high enough to be taxable. The IT department is hampered by shortage of officials to carry out surveys, checks and surveillance. However, considering the scenario, the state’s income tax authorities would have to undertake many more surveys covering more and more localities and individual and business assessees in order to end the culture of non-tax compliance prevalent among Goans. That is the surest way to grow income tax collections in the state, as the collection scene otherwise does not look very promising.
Income tax and corporate tax collections in the state have fallen by over 48 per cent over the last eight years for various reasons, one of which was evasion by businesses and individuals. The huge fall began after mining was suspended in 2012; since then the collection never picked up though mining resumed in phases in between over the last six years. The income tax collection, which was Rs 4,886 crore in 2010-11, came down to Rs 2,248 crore in 2016-17. Though it rose to Rs 2,501 crore in 2017-18, the rise does not match the previous years’ collections. Whereas all other states in the country showed positive growth in income tax collection Goa was the only state to show negative growth. The IT department has come to the conclusion that the tax collections in Goa would not achieve the records achieved during the heydays of mining. Mining companies were the largest tax payers. There were collections also from the ancillary units and services that catered to the mining industry.
That Goans have not been complying with payment of taxes or are reluctant could be gauged from the fact that the state’s direct tax collection (income and corporate tax) during the April-October period of the current financial year is only Rs 535 crore against the target of Rs 1,500 crore for the full year. The income tax officials are hopeful of meeting the target on the presumption that the second half of the year generally witnesses higher tax collection. Though the tax collection has come down, the number of income tax assessees has gone up from 1.93 lakh to 2.11 lakh (corresponding to 14 per cent of the state population), indicating that 26,200 people have come under IT assessment and are in the tax bracket. It is not that only Goans who avoid paying taxes but there could be people in other parts of the country too who have mastered the art of tax evasion.
Income tax evaders should be aware that tax evasion of above Rs 25,000 attracts imprisonment upto seven years, together with fine. Tax evasion of less than Rs 25,000 brings a penalty of three months imprisonment and fine. The businesses such as fish trade, shacks and building construction need to be more tax compliant for two reasons. One, they should not let the image of Goans as honest and law abiding suffer credibility. Two, they should avoid the disgrace of being caught by income tax authorities, with the consequences of fine and imprisonment. We are a state of very high literacy and we consider ourselves culturally superior to many communities. We must not be on the wrong side of the law. At their own end, the income tax authorities may organize awareness campaigns in collaboration with appropriate business associations and civil society groups to make tax-evading Goans start filing regular returns. Alongside the awareness raising campaign, the IT authorities should go on carrying out surveys and checks in order to detect undisclosed income with individual and business assessees.