For me, Christmas has come early this year. I was visited by an unseasonal, and unlikely, Santa Claus in the guise of the Income Tax department that presented me a gift by refunding part of the TDS, the tax deducted at source from my earnings.The refund wasn’t like winning the lottery, being about equivalent to a weekend in Goa, or the price of a not-too-smart smartphone. But its symbolic value far outweighs its intrinsic worth.Gift-wrapped in an aura of festive gaiety, the refund morphed the traditional image of the tax man, a dreaded figure like a fiscal Dracula in search of plasma transfusions, into a jovial fellow in a red suit and white whiskers who went Ho, ho, ho! as he distributed largesse to all those who’d been good babalog.In 1799, Britain became the first to tax incomes as a temporary measure to fund the country’s war with Napoleonic France. The impost was made permanent in 1842, and was introduced in India in 1860 to pay for the military expenses incurred after the 1857 uprising.Like a guest who comes to dinner and takes up permanent residence, income tax became an immovable fixture of the country’s economic landscape, reaching its peak in 1973-74 when govt took away 97.75 out of every 100 earned above 2,00,000 a year, thereby effectively turning all those in this bracket into unofficial govt servants, in that the more they earned, the more they served govt.When it became apparent that such high rates of taxation were killing the golden goose and replacing it with the illegal ghoos of shady wheeling-dealings, compliance substituted coercion as the favoured approach to revenue generation.The trick in doing this taxational transformation lay in making people feel good about shelling out money to govt. Like bitter medicine becomes less unpalatable when followed by a sweetener, govt bestows a refund every now and then on lucky taxpayers, making them feel they won the kitty in a kitty party.Or that Christmas has come early, to a background soundtrack of a jolly Ho, ho, ho!
Disclaimer: Views expressed above are the author’s own.