Nobody likes paying taxes. At best, one can understand its need, but even then, every time a certain proportion of our income is deducted, there is a pang, a sense of loss. Of late, this feeling of loss has escalated into something angrier, and social media is full of accusations about “tax terrorism.” This is even from people who have historically been supportive of the govt.
Only 4% of the country pays direct taxes, which is an abysmally low figure and does not reflect India’s income distribution. It is true that virtually everyone pays indirect taxes, a fact that is often glossed over by those complaining about paying tax. But even so, there is no question that the salaried class is made to bear a disproportionate responsibility for keeping the wheels of the govt moving through their tax contributions. The middle-class has always nursed a feeling that they are the only section being squeezed. They argue that the poor get the benefit of welfare schemes, the rich find ways not to pay taxes, both legal and otherwise.
At one level, structurally in a poor country with high income inequality, there is no escape from a small group carrying the load for the many who need public services. Taxation, in essence, is the financial backbone of democratic governance. Without redistribution through tax, no modern state can deliver on its social contract. Yet, the manner of its implementation in India has created deep alienation among the very classes whose buy-in is crucial for its success.
The anger against ‘freebies’ is in part rooted in a feeling the ‘undeserved’ get a lion’s share of the govt’s beneficence and partly because of the distrust in the intentions behind such actions. The feeling is that politicians pander to vote banks that they create not by investing in the betterment of the marginalised but by “spoon-feeding” them and keeping them dependent on govt largesse. Corporate write-offs of similar magnitude do not evoke a similar feeling because they are somehow seen to be more “deserving”, although there is substantial evidence that Indian business has been gaming the loan system for a long time.
The salaried class, with their income meticulously documented and taxed at source, watch with growing resentment as vast swathes of the economy operate in convenient shadows. The trader who may live in a mansion but who operates largely in cash, the self-employed who may be using creative accounting to hide her true income, the wealthy industrialist who declares a salary that is shockingly at odds with their opulent lifestyle—these are examples that are not exceptions but very much the rule. The conscientious taxpayer has every right to feel that honesty gets punished, and evasion gets rewarded in a system like this.
The resentment is exacerbated by visible inefficiencies in public services. The taxpayer navigates potholed roads, sends children to private schools, relies on private healthcare, and maintains private security—then wonders what exactly their tax money is funding. The “what am I getting in return for my taxes?” is a burning question today.
But there’s something more profound at work here. Taxation is, in essence, a two-way system. The social contract between govt and its citizens is that taxes translate into public facilities. The problem is that the relationship between citizen and state in matters of taxation remains stuck in colonial-era patterns. Tax officials behave less like public servants and more like modern-day collectors for an extractive raj. The subtle messaging is consistent: taxation is not your contribution to nation-building but your submission to state power. Even the language used is telling—you don’t pay tax; you “surrender” returns. You don’t comply; you “confess” income.
The way that the state deals with the taxpayer adds to the sense of being victimised. Although the tax process has admittedly become more streamlined in the last few years, the overall feeling is that of being under perpetual scrutiny. More tellingly, there is no acknowledgement whatsoever about the contribution that taxpayers are making to the nation-building process. Budget speeches talk about which sectors are being “given” an allocation and what favours the state is bestowing on citizens by lowering taxes on a particular item without conveying any sense that this is the citizens’ money that is being recirculated.
This is what lies at the heart of the matter—the missing link between taxation and accountability. Unlike the “West,” where the right to be taxed fairly was won through a process of negotiation, in India, we inherited the machinery of taxation left over from colonial times without any discussion about rights and responsibilities. The extractive nature of tax that was a feature of the colonial regime has continued unchanged and become the default mental model of the idea of taxation. If you pay tax, you can ask for nothing, but if you don’t pay, you can be prosecuted.
The current narrative around taxation needs to change from one of extraction to one of investment in shared public goods. This means greater transparency in how tax money is spent, more efficiency in its utilisation, and equal scrutiny of all forms of state support—whether to corporations or individuals.
Yet, given political realities, such changes seem unlikely in the near term. The small base of direct taxpayers means their electoral significance remains limited. Politicians find it more rewarding to announce new welfare schemes than to reform tax administration. Bureaucrats find it easier to squeeze compliant taxpayers harder than to widen the tax net.
In this sense, “tax terrorism” is less about specific policies and more about a deeper malaise—the failed evolution of a colonial extractive system into a truly democratic mechanism of shared nation-building. Until this transformation occurs, tax will remain what it has always been in India: not a citizen’s contribution but a ruler’s demand, not an investment in our collective future but a reminder of our individual powerlessness.
santosh365@gmail.com
