Impact of Big Data Analytics In Bridging India's Tax Gap!

India's performance on the 'Tax Revenue as a % of GDP' parameter is by far the lowest within the BRICS economies.Estimates peg the effective taxpayers in India to be less than 4-5% of its population.

• The current government has shown emphasised focus on increasing tax base and tackling black money through policy interventions like demonetisation, GST, tax agreements, Benami Property Act, etc.
• These initiatives will allow the revenue departments to develop a data supply chain that will capture and store data at an unprecedented scale, and speed. This data can be supplemented with data generated through digital transactions, JAM (Jan Dhan, Aadhaar & Mobile) trinity, and data from other digital platforms.

However, having this data alone will not help unless there is a focused approach towards making this data intelligent and insightful. With skills and manpower constraints across tax departments, the challenge will remain in identifying tax evasion and or fraudulent behaviour. The ability to identify misdeclarations and frauds has historically been dependent upon the experience of the tax investigators, which has often led to biases and has occasionally resulted in poor citizen experiences.

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It is here that a big data analytics platform can play a critical role in integrating and exploiting the multiple data sources to help tax departments in efficient discharge of their responsibilities and bridging the tax gap.

• This will not only help them build integrated views of tax filers and individual tax submissions but also enable them to respond in a more targeted way.
  
  
  The platform can yield better outcomes right from registration of business to filing returns,
  risk profiling of taxpayers,
  identifying scrutiny cases,
  returns assessments,
  post-filing audits in real time to better servicing and
  improving experience of taxpayers.

• It will also empower the respective departments in confronting tax malpractices like circular trading, hawala dealing, input tax credit (ITC) over-claims, sales under-declarations, transfer pricing manipulations, etc.

It's important to note that the advanced analytics approach provides early detection, reduces false positives and empowers authorities to run scenario models enabling them in better policy formation and planning. These will result in real time analysis of information, which will facilitate swift case management. 

Source: Big data analytics will help bridge India's tax gap. Here's how