The government has a constraint in reducing direct taxes since it will impact their ability to meet the planned expenses. However, is there a way to incentivise the tax payers given that only about 2 crore tax payers carry the entire burden paying direct taxes?
Here are a few ways on how the Government can recognise income taxpayers for their contributions to the public treasury. This can also serve as incentives for non-tax payers to join the tax payer band wagon.
- Issuing certificates of appreciation for taxpayers.
- Issuing special taxpayer cards that can offer various benefits, such as access to exclusive events or government-run facilities.
- Providing privileges like priority service in government offices, special lanes in public utilities and discounts on government services.
- Offering priority processing of government services, such as passport applications, visas and permits for taxpayers etc.
- Offering discounts on certain government services, public transport, or state-owned enterprise products.
- Creating exclusive forums for taxpayers to interact with policymakers and provide input on tax policies.
- Offering free or discounted passes/vouchers to government run museums, parks, monuments, theatres and cultural events.
- Providing discounts on travel in government owned entities, government managed accommodations and tourist attractions.
- Offering financial benefits like reduced interest rates on loans for consistent taxpayers.
- Providing Unemployment Allowance for a consistent taxpayer when they lose their employment till they are able to get another job.
- Offering free/discounted and preferential access to health care in government run medical establishments.
- Offering matching savings plans for education, retirement, or healthcare, where the government matches a portion of the taxpayer’s contributions.
- Creating loyalty programs where consistent taxpayers earn points that can be redeemed for discounts on government services, utility bills, or even partnered commercial services.
- Providing scholarships/preference in admissions to government run educational institutions for taxpayers and/or their dependants based on consistent tax compliance and contributions.
- Implementing systems that allow real-time tax calculations and adjustments throughout the year, reducing the burden of annual tax filing.
Some of these innovative benefits will help acknowledge taxpayers' contributions, foster a more engaged and compliant tax-paying community and increase the tax payer base.
