India to clamp down on tax evaders through holiday snaps
TAX evaders could potentially find themselves in hot water if India’s government begins poking around their social media feeds through the new “Project Insight” big data plan.
India will be launching a new big data initiative aimed at curbing the spread of tax evasion through a massive virtual information drive with an innovative twist: the warehouse that will be gleaning this information will not only be looking at traditional bank statements, but also social media in order to match citizens’ spending habits with their income declarations, Bloomberg reported.
Spending some time in the Maldives, but you’re earning US$20,000 a year? Best watch out, as Prime Minister Narendra Modi’s right-wing government continues on its crusade to crack down on widespread corruption in the country’s highest classes.
Personal social media accounts can be used to identify those paying too little tax, said sources to Bloomberg, and police could avoid raiding offices and homes and wasting manpower.
Modi’s “Project Insight” will be a seven-year project estimated to cost INR10 billion (US$156 million). It will comprise of several parts, including the world’s most ambitious biometric identity database, and the ongoing tax reform project the government is undertaking.
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Tax evasion has always been a problem in India, one of the fastest growing economies in the world which regularly emerges with the biggest income inequality gaps in the world. India will be following in the footsteps of other countries, such as Belgium, Canada and Australia.
The UK’s “Connect” project seems to be a kind of foundation of India’s “Project Insight”. Since its implementation in 2010, “Connect” has prevented GBP4.1 billion (US$5.4 billion) of tax revenue from vanishing, according to the Institute of Financial Accounts in London.
“Data analytics is the way forward for tax administrations across the world,” Amit Maheshwari, managing partner at accountancy firm Ashok Maheshwary and Associates near New Delhi, told Bloomberg.
“This will also put an end to harassment by tax officials as there will be no public interface. Perceived randomness in scrutiny will come to an end.”
Sources told Bloomberg they expect compliance to rise by around 30 to 40 percent after the initial launch of the project, though the expected chaos from the tax reform project will be inevitable.
The first stages of “Project Insight” will require all existing data – credit card bills, investment portfolios, bank statements – to be moved onto new centralised digital systems.
This system will be responsible for keeping citizens responsible for filing their tax declarations through snail mail or email. The second stage, which has an expected roll-out date of December, will mine the systems for data that will then be cleaned and processed into individual profiles that can be examined and targeted.
** This story was originally published on our sister website Tech Wire Asia