(MENAFN- NewsBytes)
Project Insight: Your Facebook/Instagram post can soon detect tax frauds
28 Jul 2017
Data analytics is one of the most lucrative career options in today's age. But most Indians probably weren't expecting the government's plans with it.
Under 'Project Insight', authorities will track posts on social media to determine if people's spending patterns match their tax declarations.
So maybe think twice before posting photos of your shiny new car or luxury trip on social media.
What is the ambitious Project Insight?
Insight
The Finance Ministry's Project Insight, in line with UK's 'Connect', was conceptualized at least seven years ago and has cost roughly Rs. 1,000cr. It planned to exploit technology to widen the tax base and curb down on tax evaders.
Last July, the government signed a deal with L&T Infotech Ltd for its three-phase implementation which was expected to start from May'17.
How exactly will it ease things?
Benefits
According to former CBDT chairperson Rani Singh Nair, India's tax-to-GDP ratio is 17%, while for most Asian countries it is 24-25%.
Insight is expected to help bridge the gap by automating most processes and cutting down time needed for resolution of tax evasion cases.
Insight will track PAN used in different aspects of life and tally relevant data with declared tax filings.
What role will L&T play?
Fact
For L&T, this is a long-term project though no time frame has been specified. It will work on the build-own-operate-transfer model: it will build and run the project during the contract period and then transfer the system to the government afterwards.
The project will be implemented in three phases
Phases
In the first phase, all data will be migrated to a new system. There will be no physical interaction, only virtual/postal communication. Compliance is expected to rise 30-40%.
In the second phase likely by December, the information will be cleaned and processed. Individual spending profiles will be made.
In the last phase, future defaults will be predicted and risks flagged.
Caution: Judicious use is mandatory with such a potentially-risky project
Concerns
In a country where the government has refused privacy as an absolute right, the project does bring with it special concerns.
Based on a study of 21 countries that use technology to detect tax fraud, the OECD concluded that legislative measures must be followed while implementing them in consultation with taxpayers.
However, it also noted such projects boost revenue and make compliance cheaper.
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