Yuvraj Singh, our Indian cricketer last month received a notice from the Goan authorities for not registering his villa ‘Casa Singh’ in Morjim, before he put it up on rent through online home-stays. Yuvraj will now realize that Singh is not King in Goa, and while it might be easy to hit sixes of English fast bowlers such as Chris Broad, it is entirely a different matter to face the bureaucratic googlies thrown by the Goa administration off and on. Yuvraj need not be upset at this development, because most Goans are perpetually hassled and mostly end up giving out some data or the other to the government on their very minute personal and business dealings, privacy can wait.
Registering home-stay units with local authorities especially with the local police seems completely logical and essential, but for the tourism department to seek data could be a mean to control and make sure politicians are kept in the loop in a transaction between home-stay owners and the tourist. Mostly such data points should be used by local politicians to plan the development of their constituencies but the flip side is that this data can simply be used to extort home-stay owners like they are used to doing with registered starred hotels. Let’s not be under the impression that starred hotels get their work done without greasing local politicians. The proof being that most starred hotels always do their opening with local politicians cutting the tape, even if it means a lousy looking photo ops and a bad marketing ploy.
If you enjoyed reading this article, you can help support our journalism by adding OHeraldo as a preferred source.
But this piece is not about politician illegal extortion, but the real intention of the tourism department data gathering exercise of home-stays in Goa. Look, the Government in Goa is always in financial stress and the more money they collect in some form or other, the better it is. So how do we know that this data will not be used to plan a future tax bomb that will definitely come in some form of the other on home-stay businesses over and above the existing GST. You see Goa government has a huge number of employees to feed and to finance their fat salaries and perks the government has no choice but to find bizarre ways to increase their revenue. They already collect tax from the hotel industry, what makes us think that they are not going make life hell for home-stay owners. The big players in the hospitality industry regularly fill the government coffers with sizeable collections; now it is time to tax the small players as well which mostly consist of home-stays owners. This is in spirit of the tax hunting method used by the government on each and every business that is run in the country.
The short point being, that heavy taxation have troubled most industries, but the fact remains that the final tax bill is always paid by the end user. The industry happily passes on the tax increase onto the customer and will speak only when their demand gets affected or their balance sheet gets stressed. Telecom and the Car industry have recently opened their mouths on heavy taxation these industries are facing, but the noise is still muted to bring about a change in thinking in Delhi.
The worse part of the story is that the government appetite to tax does not seem to wane, and the way high net-worth Indians are shifting their base and family offices out of the country, it’s only a matter of time India increase or introduces again wealth tax and inheritance tax. Please note this writer has no contacts in Delhi or any inside information to really know what’s coming in the budget, but don’t be surprised if wealth and inheritance tax is broached upon. The only reason this might be delayed is because this will be the last budget before the general elections and the Prime Minister might now want to antagonize a certain section of the population and jeopardize his re-election campaign, instead he might surprise on the upside with personal income tax cuts, but abolishing income tax is too farfetched.
Even if the finance and prime minister are sold to the idea of abolishing income tax, the people that run their ministries are not going to allow them to make that decision. Recently the Parliament authorized the government to spend more than 3.25 lac crores to tackle inflation. Imagine the finance minister goes to her revenue secretaries and sundry and ask them how to mobilize such a huge amount, do you think these secretaries are going to tell her, ‘Madame we have excess staff in our offices throughout the country and we need to get rid of them so that the government improves its fiscal health. No!, they are going to come up with new ideas on how to tax the hell out of the citizens, their businesses, their income, their expenditure, their wealth or their inheritance.
However, there was a pleasant surprise from the telecom & railway minister on Christmas Eve as he sacked ten officials from the Department of Telecommunication for ‘doubtful integrity’ and forty officials from the railways for the same reason. While this news is much appreciated it will have credence if this becomes a regular feature and not some PR stunt conducted as part of the Good Governance day which India celebrates on Christmas day.
Tax collection is a very important obligation for citizens to pay to the government as it needs money to run the country. But when government starts filling their offices with unnecessary workforce and to finance their salaries it starts collecting taxes from its citizens left right and center, it is time to put your hand up. No idea what happened to Yuvraj Singh, but there is a clause in his notice that says if he fails to appear or reply to the notice then he pays a penalty of upto one lac rupees. Told you, they just want the money in any form. Goans already into or planning to open, their homes to tourists please take future tax into consideration before investing in home improvements. Tax surprises are imminent.
(The author is a business consultant)
