How to make tax officials accountable

The proposed simplification of the tax code offers a chance to instil accountability, following the model of the Public Service Guarantee Acts

A friend, Kalpesh, recounted an interaction with an Income Tax Officer (ITO) from a decade ago. Kalpesh, who ran a startup then, faced scepticism from the ITO, who suspected that high venture capital investments in his company, despite its losses, were part of a money-laundering scheme. The ITO added the share premium as “income from other sources”, resulting in a significant tax demand.

The startup was compelled to pay one-fifth of the substantial tax demand upfront. It appealed the assessment, but the Commissioner of Income Tax (Appeals) rejected it as expected. The company then turned to the Income