Corruption in Tax
MAHESH C. PUROHIT
Corruption has always been in existence, in one form or another. As far back as the fourth century BCE, Kautiliya, a Sanskirt scholar, wrote, “Just as it is not possible not to taste honey (or poison) placed on the surface of the tongue, even so it is not possible for one dealing with the money of the king not to taste the money in however small a quantity. Just as fish moving inside water cannot be known when drinking water, even so officers appointed for carrying out works cannot be known when appropriating money” (Kangle 1972: 91). Kautiliya points out the ways in which employees can be involved in corruption and prescribes the modus operandi to be adopted by the king to deal with corruption and make appointments.
Broadly speaking, corruption can be classified into five categories: political corruption, administrative corruption, grand corruption, petty corruption, and patronage/paternalism and being a “team player.” In this chapter the term is defined to include pecuniary or nonpecuniary considerations given to government officials for the use of public office for private gains.1 Activities that lead to personal benefit that do not involve the government or a quid pro quo are not examined here.
The scope of this chapter is confined to corruption in tax administration. The chapter is divided into five sections. The first