Big Data is expected to make the jump into Government offices as it may help in increasing the tax collections. Data such as spending patterns when analyzed can help Governments access critical information which can in turn help in receiving higher taxes. The IT industry is looking towards the next few years to solidify the Big Data position.
Vice President of Infosys and India business head Raghu Cavale said, “Government is planning to use analytics to increase its revenue base.” Similarly numerous industry experts and insiders believe that Big Data Analytics might be the key to numerous issues that India is currently embroiled in.
Growing the tax payer base
While India has a booming population undoubtedly, the number of taxpayers has been crawling forward over the past 5 to 10 years. The number of tax payers in the country currently stands at 3 crore. The slow pace of growth in the numbers has pushed the Government into seeking measures that will foster a healthy growth in the base.
Cavale also said, “The economy has been been [sic] expanding, which essentially means that the number of people coming in the tax rate should be more. But it is not so.” This difference is crucial and filling the gap is the job that Big Data analytics is entrusted with.
Why Big Data?
The field has had a crucial role to play across various industries in the recent past. The IT firms whose business is collecting and analyzing large volumes of data have global clients from various walks of life. The client base includes finance, health care, marketing, climate, utilities and transaction records. The list is limited at best and is consistently growing across the world.
Government data records show that the total number of tax payers for the fiscal year of 2011-2012 stood at approximately 3.24 crore. In citing the specific role that big data analytics can play in the tax payer scenario, Cavale said, “As a nation, we can put together all the data. If you travel abroad, buy expensive jewellery, we can check your digital footprints on online shopping and piece together a person’s lifestyle and through that create a taxable database.”
There are numerous governments across the world that are relying on analytics in order to help increase their tax payer data base. For example, Cavale spoke of the Italian Government that tracks the lifestyle, spending and travel patterns of their citizens to track down those who are possibly evading taxes.
Cavale also said, “So we can use this data analytics to expand out taxable database. Our total direct taxes are only 9% of our GDP, whereas it should be about 18%, and you cannot raise it by taxing people who you have already taxed. You are going to use analytics.”
When asked about the company’s involvement with the Government and its use of IT for collecting and using the income tax information, Cavale said, “We are discussing with the government many projects. Some have already been tendered, which we have won. Some other people are doing it. Government is very well aware of data warehousing and analytics. It is talking to us as well as other firms.”
Rs. 4.73 lakh crore was collected by the Finance Ministry during the fiscal year 2012-2013 in indirect taxes alone. A target of Rs. 5.65 lakh crore has been fixed for the current fiscal year. The target includes indirect taxes composed of excise, customs and service taxes. The first six months of 2013-2014 have shown an indirect tax collection of about Rs 2,28,550 crore. The Government may very well be on a path to collecting all the taxes set in the target. Reaching the target and even surpassing it, however may be a reality with the help of tools like big data analytics.