Hyderabad: Tax evasion a sin – Religious experts

Hyderabad: The Economic Survey on Thursday most unusually used religion to appeal people against defaulting on loans and evading tax, and warning them that doing so is a sin.

Chief Economic Adviser Dr Krishnamurthy V. Subramanian, said in the report: “The repayment of debt in one’s own life is prescribed as necessary by scriptures across religions. Given the importance of religion in Indian culture, the principles of behavioural economics need to be combined with this spiritual or religious norm to reduce tax evasion and wilful default in the country.”

The survey was conducted by a team led by the CEA. Quoting from Hindu scriptures, the report said non-payment of debts is a sin and also a crime in Hinduism. “The scriptures ordain that if a person’s debts are not paid and he dies in a state of indebtedness, his soul may have to face evil consequences. This is a duty or obligation of a child to repay the debts of the deceased parents,” the report said.

Moving on to Islam, the report notes that ‘Prophet Muhammad advocated Allaahummainnia oodhi-bika min al-ma’thamwa’lmaghram (O Allaah, I seek refuge with you from sin and heavy debt). “A person cannot enter Paradise until his debt was paid off. All of his wealth could be used to pay the debt and if it is insufficient, then one or more heirs of the deceased could voluntarily pay for him,” the report said.

Linking tax evasion to a quote from the Bible, the report said: “Let no debt remain outstanding except the continuing  debt to love one another (Romans 13:8)” and “The wicked borrows and does not repay, but the righteous shows mercy and gives(Psalm 37:21).”

This odd mixture of scripture and economics was well-received by religious leaders, who however linked it to the government’s obligation to provide good governance and take responsibility for the welfare of citizen.

Moulana Mohammed Abdur Raheem Khurram Jamai said if citizens use facilities provided by the government, it was their duty to pay taxes on time. “For a Muslim, tax evasion is a sin, but it is the duty of the government to provide good governance and ensure facilities to its citizens without discrimination,” he said.

Fr Vincent Arokia Das quoted the Bible: “Jesus said give to the Lord what belongs to the Lord and give to the king (government) what belongs to them — It is fair to give what is due to the state and that would make us good citizens. It should not be forgotten, at the same time, that the state has the responsibility of ensuring the welfare of the citizen.”

Hindu priest Rangaswa-my identified the government as Lord Vishnu. “Vishnu has set a number of rules which are to be followed and respected. Every citizen benefiting from the government must pay taxes. Defaulting is a crime. At the same time, Chanakya had said that the state should collect taxes like how a honey bee collects honey from a flower without hurting it,” he said.

Apart from religion, the Survey recommends incentivising the payment of taxes by recognising the individual’s contribution through granting him or her VIP-like treatment.

The Survey also made a somewhat dubious suggestion to privilege top tax payers: “As people often indulge in conspicuous consumption to convey their social status, the top 10 highest tax payers within a district can be highlighted and accorded due recognition. This may take the form of expedited boarding privileges at airports, fast-lane privileges on roads and toll booths, special “diplomatic” type lanes at immigration counters, etc.”

“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. 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.”

It would be interesting to see what commentators make of this controversial suggestion.