Soon,
GST
officers will study the behavioural pattern of certain taxpayers to
nudge them to comply with tax laws, in a departure from the current
practice of focussing only on deterrent action to check evasion.
The Central Board of Indirect Taxes and Customs (
CBIC)
has set up a 'Nudge Team' to formulate a strategy on studying
behavioural patterns of taxpayers and use segmented approach to
encourage
them to pay taxes, an official said.
The plan is based on 'behavioural interventions' or 'non-deterrence approach' adopted by countries like the UK,
Australia and
Mexico to frame policies and increase tax collections.
"On the basis of the behavioural pattern, the department will segregate
taxpayers into different categories like 'disengaged', 'resisters',
'triers' and 'supporters'," the official told PTI.
Elaborating on the plan, the official said in cases of non-wilful
defaulters, the tax department would adopt a soft approach to persuade
them to comply with tax laws by sending them personalised emails
reminding them about the default in tax payment cycle.
Efforts will also be made to educate these taxpayers about provisions
like payment of taxes in instalments in case of liquidity crunch, and
other benign provisions of the tax laws to enable them to comply with
statutory provisions.
Those who do not comply with tax laws and deliberately evade
their responsibility would be categorised as 'disengaged', while those
who view the system as oppressive but can be persuaded if their concerns
are addressed will fall under the category of 'resisters'.
'Triers' will be those who are willing to comply but face difficulties
in paying taxes due to various factors. 'Supporters' will be categorised
as those who willingly comply with tax laws and support the system.
"Tax officers will adopt a different approach to deal with different
categories of taxpayers based on behavioural pattern," the official
said, adding the 'Nudge Team' will sensitise the field officers about
the new approach to persuade entities to comply with tax laws.
The first meeting of the 'Nudge Team' will be called soon by the
Principal Director General GST to decide on the strategy to adopt the
new approach at the field level.
The official said that as part of the 'behavioural interventions',
emphasis ought to be on social norms, perceptions of fairness and tax
morale while maintaining a 'non-deterrence' approach.
Indirect tax
reform Goods and Services Tax (GST) was rolled out on July 1, 2017.
With GST systems now stabilising, the focus of CBIC is now on increasing
compliance and checking evasion.
The government has also set up Directorate General of GST Intelligence
(DGGSTI) to investigate cases of tax evasion and conduct search and
seizure operations under the GST Act, and erstwhile Excise and Service
Tax Act.
AMRG & Associates Partner Rajat Mohan said the concept of
soft-approach by the tax department is a novel idea. "However, the
taxpayer needs assurance that this would not be a mere paper scheme,
confirming that benefit could be conceded at the grass-root level," he
said.