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Data Analytics Emerges as Unique Glue for Plugging Revenue Leakages
- Published on 05 April 2018
(Edited Image Courtesy: OECD)
Data Analytics (DA) is making headlines for varied reasons. They range from misuse of social media’s big data to influence voters/consumers to catching tax deviants for boosting revenue to fund growth.
Governments including tax administrations across the world are at different stages of unraveling the potential of data analytics in boosting revenue.
As put by McKinsey, “Digitization creates a massive trail of data that can support more-effective revenue and payment programs. There is an emerging consensus globally that governments can and should use this data to reduce revenue leakage, subject to strong privacy constraints prescribed by policy makers”.
In a report titled ‘The trillion-dollar prize: Plugging government revenue leaks with advanced analytics’, McKinsey notes that about 20% of government revenues worldwide, or about $5 trillion goes missing every year.
It believes that Governments can plug 20% of these leakages through application of big data analytics and related efforts over several years. This, thus, constitutes a trillion-dollar opportunity globally to ramp up tax revenue.
India, which is new as compared to the West in the Big Data game, is harvesting preliminary successes in both direct and indirect taxes domain.
India Needs Good Governance & Not New Law to Catch Fugitives
- Published on 23 March 2018
(Edited Image Courtesy: darpg.gov.in)
The Fugitive Economic Offenders Bill, 2018 (FEOB) is a classical instance of the dog barking up the wrong tree. The only difference between classic and FEOB is that the bark at the wrong tree is intentional.
FEOB is mere political posturing before public that is upset with NDA Government’s propensity to look the other way when economic offenders dart away to alien lands.
Introduced in Lok Sabha on 12th March 2018, FEOB seeks “to provide for measures to deter fugitive economic offenders from evading the process of law in India by staying outside the jurisdiction of Indian courts, to preserve the sanctity of the rule of law in India and for matters connected therewith or incidental thereto”.
Says the Government: “The absence of such offenders from Indian courts has several deleterious consequences, such as, it obstructs investigation in criminal cases, it wastes precious time of courts and it undermines the rule of law in India. Further, most of such cases of economic offences involve non-repayment of bank loans thereby worsening the financial health of the banking sector in India. The existing civil and criminal provisions in law are inadequate to deal with the severity of the problem”.
Blame-Game Over PNB Scam Tramples Truth
- Published on 05 March 2018
(image courtesy: https://www.narendramodi.in/examwarriors)
Facts become the martyrs when politicians play blame games. Obscure facts are getting buried under the impact of fierce mud-slinging between Modi Govt-BJP camp and the Opposition especially the Congress Party over PNB scam.
Fact is that the scam is unintended bhagidari of BJP and Congress regimes. The ecosystem for scam was jointly conceived by both without anyone realizing that it would be misused by Nirav Bhai, Mehul Bhai and their ilk.
The second fact is that bond between diamond business and Prime Minister Narendra Modi is too entrenched to be brushed aside as dirty politics. Third, accountability has to be fixed right from PNB to the PMO. They either overlooked or took in stride banking frauds that were even pinpointed by a RBI Deputy Governor at a conference in 2016. More of this later.
Ideally, the Supreme Court should step in and constitute a special investigation team (SIT). It ought to oversee full-fledged probe into a web of willful loan defaults, money laundering & cheating cases within the diamonds sector.
Focus on Domestic Taxation for SDGs Shouldn’t Sustain ODA Laxity
- Published on 04 March 2018
(Image Courtesy: The United Nations)
The governments’ urge to shore up tax revenues is universal. And this desire gets universal endorsement from multilateral development institutions (MDIs) when it comes to raising domestic resources for eliminating poverty & inequality on the earth.
But when the tax-raising objective gets subsumed into OECD’s 15-Action Points Base Erosion and Profit Shifting (BEPS) project & related tax reforms, the world should take a hard look at the means to achieve inclusive development agenda.
Four MDIs have lately been goading developing countries especially the poorest ones to pull their taxation socks to achieve United Nations (UN)-mandated Sustainable Development Goals (SDGs) by 2030.
The four MDIs are the UN, the World Bank, International Monetary Fund and Organisation for Economic Cooperation and Development (OECD).
Is the focus on taxation a smokescreen to implement BEPS project from the standpoint of developed nations that want MNC investments and their tax revenue back home?
Is focus on domestic tax revenue as financier for SDGs a ploy to divert attention from the West’s failure to comply with minimum level of official development assistance (ODA) that was globally agreed decades back?
Why quartet can’t hammer out a global agreement on levying global, innovative taxes as a new avenue for funding SDGs?