Corruption Free Practice: “Yes we Can”

CA. Madhukar N Hiregange

Corruption means:

• Spiritual or moral impurity or deviation from an ideal.• Abuse of entrusted power for private gain• Hurts everyone who depends on the integrity of people in a position of authority• How impatient/ Pliable the giver is?

Unscrupulous Officers Increasing - Reasons !!!

1. Environment - Ethics, integrity and honesty - back seat ?

• Some Citizens/ professionals and corporate - go to any extent to avoid payment of bribes

• Bribery - way of life – feeling of better off – officer would anyway harass them

Are we forced to do so?

2. Whether able to have respect of the employees, customers, suppliers and tax dept. - moot question

• does not like to indulge in demeaning practice – majority

• but may have to adopt - avoid harassment and unending litigation

• Ethical professional could be a support and unethical means would reduce substantially

• Majority of transaction / tax payers find - need not do distasteful practice - bribe offering / taking automatically reduce

• Youth today are concerned – not find bribing as “cool” as it was earlier

• Not paying is “cool”• 3. Tax officers use certain tools for starting off the

exercise from pliable tax payers

More Reasons..

4. Feeling among some professionals without compromising [paying bribe] - cannot survive

• Work may be faster by compromising – high cost 5. MNCs - inbuilt understanding - not to violate any

laws in the country • Largest business houses like Infosys, Wipro, Tata,

GE group on record to say - do not encourage this method of doing things

Reasons …

• Most big businesses follows tax laws - avoids evasion other than a few wayward industries

• Enterprises contributing almost 70% of corporate taxes / indirect taxes - require ethical professionals

6. Reality - Ethical practitioners have great self respect• revenue department also respects • not only surviving but are flourishing

Possible Defense• General fishing enquiries seeking large amount of

information: Seek reasons, provide sample bills. If doubt raised, even orally, put answer in writing• Calling incessantly seeking meeting: Fact maybe recorded and letter sent asking queries in writing. Maybe if too much mark a copy to higher officer - send by RPAD• Threat of raid/ summons/ seizure: Dealings are clear / records updated - no need of fear - put threat on record and intimate higher officer • Non communication, delay in application, indecision:Reminders with escalation to higher officers . If information block exists - RTI an alternative

Possible Defense• Audit- making up long list of non compliances and

offering to drop issues: Self audit - many issues would be resolved or ready answers to expected issues could be ready.• Once demand raised, assistance in getting the same

dropped: Process of order - inbuilt appeal mechanism. When compromises agreed - sword of Damocles always hangs. • Refund applications are a major area of corruption:Correspondences in writing and escalate when needed.• Many others: Tax payers to be vigilant and updated on

ever changing laws. There should be an Independent ombudsman in every department

Best Practices - Professional

• Provide value addition / satisfaction to clients without compromising ethics – understand their needs

• Ensuring focus on employee recruitment / training / retention

• Utilizing technology to monitor - do repetitive works - capture hours spent by different professionals

• Changes in laws – examine• Professional competence – continuously maintained

Best Practices - Professional

• Delegation -proper checks and balances - free professional to take up work of higher value - client’s loyalty

• Written and oral communication – improvement required

• Good presentation and communication skills - financial gains and better perception of the value

• Globalization, remote working - knowledgeable professionals to provide value added services in India and abroad

• Research / desk audit – time to spend

COURAGE

“One man with courage is a majority.” -Thomas Jefferson

madhukar@hiregange.com