Business India Technology
The Indian government is planning to use big data and analytics information available on corporate houses and individuals for income tax assessments. From August, the government will start collecting statistics from usual sources like banks as well as online transactions and social media sites to match the spending and lifestyle patterns of a citizen with income declarations.
An Ambitious Step
The seven-year Rs 1,000 crore ($156 million) ‘Project Insight’ is an ambitious step in the pipeline for tax overhaul, which will be in line with the world’s largest bio metric identity database, Bloomberg reported.
Many other countries, such as Belgium, Canada and Australia, are already using big data to detect tax evasion, and the UK has a similar system in place called ‘Connect,’ that is said to have cost around £100 million. Italy recovered more than 14.2 billion euro as tax payments in 2014 in its bid to crack-down on tax-evaders. This was done through digging out mobile phone data, social data, city related data, web-based data, and health-related data from various accounts.
The report added that the government had contracted L&T Infotech Ltd, an arm of Larsen & Toubro Ltd., last year to help build the network, which is a long-term project. The first phase of the project will see compliance rising 30-40 per cent, and will involve migration of existing data, including credit card expenditure, investments, cash transactions and deposits, to the new system. A central team will send notifications to concerned citizens to file tax declarations, it added.
Tracking Individual Profiles
The next phase of the project, which will be launched by December, will involve processing of the information to create individual profiles. The last phase will be started around May 2018, and put in place advanced systems to predict future defaults.
The government’s plans to use big data and analytics to increase its revenue base is also making IT companies expect a boost in business.
“As a nation, we can put together all the data,” Infosys vice president and India business head Raghu Cavale told PTI.
“If you travel abroad, buy expensive jewellery, we can check your digital footprints on online shopping and piece together a person’s lifestyle and through that create a taxable database.”
Cavale gave the example of Italy, where the government follows people’s lifestyle, travel and spending pattern to track potential tax evaders.
India’s tax-payer base is just about 3 crore and has been increasing slowly for the last 5-10 years, which the government would like to see speed up. Infosys as well as other firms are bidding for various projects in the area. “Government is very well aware of data warehousing and analytics. It is talking to us as well as other firms,” Cavale told the news agency.