| Move away from fixed tax targets: Shome |
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New Delhi, 3 May A tax reforms panel, headed by finance minister's advisor Parthasarathi Shome, is considering moving away from setting fixed tax- collection targets and linking these with the changing economic scenario during the year. The idea, if implemented, might help ease pressure on the tax administration to meet targets set at the start of the year. The Tax Administrative Reforms Commission ( TARC), which was likely to file its first report to the government by the end of May, had received representations that a static target exerted unnecessary pressure on both field officers and honest taxpayers who were asked to pay more if there was ashortfall, an official who did not wish to be named said. "All countries that I know have moved away from the static revenue target principle. The target moves depending on the economy. The difference between the moving target and what you collect is the gap. Minimise the gap over a fortnight, over a month, over a quarter. We must move in that direction," Shome told Business Standard. He said the administration faced tremendous pressure to collect revenue irrespective of the condition of the economy. "That, in turn, is one reason of extreme dissatisfaction among taxpayers. That also makes it infeasible to go after real evaders, since it turns good taxpayers into bad," Shome added. The TARC is also reviewing judicial powers of assessing officers by looking at how decisions are made in terms of prevention, management, and resolution of tax disputes. The assessing officer is a quasi- judicial authority for the tax department who can disallow expenditure shown by an assessee, make adjustments to income, call for information, conduct searches, reopen assessments and have accounts audited. "The issue is authority rests at a relatively junior level. Is that the right place? We can consider where the first adjudicating level lies. Does it also imply the upper levels should not have any authority? That is what we are considering, since many of the disputes are at the assessing- officer level," Shome said. Asked whether there was a proposal to merge the Central Board of Direct Tax and the Central Board of Excise and Customs, he said the TARC was examining whether some operations, such as information technology, could be clubbed. "What we are saying is, try and find out where the two departments have common interests and then see whether you can generate better product delivery through combining them," Shome added. He said despite Large Taxpayer Units ( LTUs) being established in 2006, " little synergy has been reaped so far between the departments, while 50 countries have proceeded with that very approach. Should we not benchmark ourselves as well?" The TARC, set up in March this year to review tax policies and laws against global best practices and recommend reforms, must submit its report in 18 months. 'Link these to changing economic scenario' "All countries I know have moved away from the static revenue target principle. The target moves depending on the economy. We must move in that direction" PARTHASARATHI SHOME Finance Minister's Advisor |
| If Steve Jobs were alive today, should he be in jail? |
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Jobs seems never to have read, or may have chosen to ignore, the first paragraph of the Sherman Antitrust Act. Every " conspiracy, in restraint of trade or commerce" is illegal, the act says. " Every person who shall make any contract or engage in any combination or conspiracy hereby declared to be illegal shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine" or " by imprisonment not exceeding three years, or by both said punishments." Jobs " was a walking antitrust violation," said Herbert Hovenkamp, a professor at the University of Iowa College of Law and an expert in antitrust law. " I'm simply astounded by the risks he seemed willing to take." The anti- poaching pact was hardly Jobs's only postmortem brush with the law. His behaviour was at the center of an e- book price- fixing conspiracy with major publishers. After a lengthy trial, a federal judge ruled last summer that "Apple played a central role in facilitating and executing that conspiracy." ( Apple has appealed the decision. The publishers all settled the case.) Jobs also figured prominently in the options backdating scandal that rocked Silicon Valley eight years ago. Thousands of options were backdated at both Apple and the computer animation studio Pixar, where Jobs was also chief executive, to increase the value of option grants to senior employees. An investigation by Apple's lawyers cleared Jobs of wrongdoing, saying he didn't understand the accounting implications. But it concluded that he " was aware or recommended the selection of some favourable grant dates." Jobs himself received options on 7.5 million shares, which were backdated to immediately bolster their value by over $ 20 million. Apple admitted that the minutes of the October board meeting where the grant was supposedly approved were fabricated, that no such meeting had occurred and that the options were actually granted in December. Five executives of other companies went to prison for backdating options, but Jobs was never charged. ( Other Apple executives eventually settled Securities and Exchange Commission charges and left the company. The commission did praise Apple itself for its " swift, extensive and extraordinary cooperation.") Despite the strict language of the Sherman Act, the justice department tends to file criminal antitrust charges only in the most egregious cases, and by that standard, Jobs would probably never have been charged. Still, Mr. Jobs's conduct is a reminder that the difference between genius and potentially criminal behaviour can be a fine line. Jobs " always believed that the rules that applied to ordinary people didn't apply to him," Walter Isaacson, author of the bestselling biography " Steve Jobs," told me this week. " That was Steve's genius but also his oddness. He believed he could bend the laws of physics and distort reality. That allowed him to do some amazing things, but also led him to push the envelope." Brian Lam, a technology reporter and founder of The Wirecutter website, said that a few antitrust issues hadn't dimmed Jobs's luster in Silicon Valley. " His reputation is pretty much set in stone," Lam said. Jobs " didn't pay much attention to convention, and now more than ever, that's the culture of tech companies." Professor Hovenkamp characterised both the e- book agreements and the antipoaching pact as " blatant restraints of trade." Mr. Jobs, he said, " was so casual about it, so bold. Didn't he have lawyers advising him? You see this kind of behaviour sometimes in small, private or family- run companies, but almost never in large public companies like Apple." Apple declined to comment. Jobs was certainly brazen. Testimony in the e- books case suggested that Jobs was eager, even frantic, to have an e- book agreement in place in time for his announcement of Apple's latest product, the iPad. There's no indication that any lawyers put the brakes on. ( On the contrary, the chief architect of the scheme inside Apple was a lawyer.) In an email to James Murdoch, then an executive at News Corporation, which owned the publisher HarperCollins, Jobs offered what amounted to a classic case in price fixing: " Our proposal does set the upper limit for e- book retail pricing based on the hardcover price of each book" and urged HarperCollins to " throw in with Apple." HarperCollins did, along with other major publishers. Judge Denise L. Cote of Federal District Court for the Southern District of New York ruled that "Apple is liable here for facilitating and encouraging the publisher defendants' collective, illegal restraint of trade," adding: " Through their conspiracy, they forced Amazon (and other resellers) to relinquish retail pricing authority and then they raised retail ebook prices. Those higher prices were not the result of regular market forces but of a scheme in which Apple was a full participant." Why were no criminal charges filed? The justice department's antitrust division chief, William J Baer, recently noted that the department had filed 339 criminal antitrust cases since President Obama took office, many of them on charges of price- fixing. The issue is, of course, moot with Mr. Jobs, who died in 2011. But his co- conspirators in the publishing industry may have benefited from the relative novelty of e- books. " There's a traditional reluctance to go for criminal liability over novel practices," Professor Hovenkamp said. " There was probably some thinking that with ebooks, the technology was so new, and it was disruptive. It's tough to prove mens rea," or criminal state of mind. And there may have been political constraints, too. Although consumers were the beneficiaries of the case ( and prices of e- books have dropped since the case was settled), publishers and their allies, including many authors, warned that the perverse result was to solidify Amazon's dominance. The anti- poaching case may be taking a bigger toll on Jobs's reputation, especially since he seemed so cavalier about people's jobs. Jobs was again injudicious in his emails to competitors. In 2007, he threatened Palm Inc. with patent litigation unless Palm agreed not to recruit Apple employees, even though Palm's then- chief executive, Edward Colligan, told him that such a plan was " likely illegal." When Jobs learned that the Google recruiter who contacted the Apple employee would be " fired within the hour," he responded with a smiley face. "How could anyone have approved that?" Professor Hovenkamp asked. " Any competent antitrust counsel would know that's illegal. And they had to know they'd get caught eventually." Apple, Google and other technology companies reached an agreement with the justice department over the no- poaching practice in 2010, and agreed not to engage in any agreement or activity to reduce or prevent competition for employees. Last week, Apple and other technology companies settled arelated class- action lawsuit, agreeing to pay $ 324 million. ©2014 The New York Times News Service JAMES B STEWART Apple co- founder Steve jobs |
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