With the announcement of discounts and benefits by the government on digital payments, the multi pronged approach taken by the government that started with the demonetisation of Rs. 500 and Rs. 1000 notes was made very clear. The announcement by the Finance Minister Arun Jaitley came at time when the debate on the actual objective of demonetisation was still raging on everywhere but the parliament where it was continuously being disrupted by the opposition that even prompted the President, Pranab Mukherjee to state that it is the “gagging of the majority”. It is certain that even though there had been unexpected results that the government had not anticipated earlier, the move by the government did take many of the political opponents by surprise.
Along with the sudden move to demonetise the largest number of notes in circulation to curb black money and penalise those people who had not declared their unaccounted money during the time given till September, and also render fake currencies useless, it is now certain that the government had plans to move to a cashless economy. Only by doing this can the government ensure that after relaxation on the withdrawal limit after the December 30 dateline the country will not be back to square one on the issue of black money, fake currencies and terrorists funding. It may not have been the best of tactics but the government in its demonetisation drive was able to instil a sense of fear that the paper money that one holds can go out of value anytime more so for those who have unaccounted money. With the GST set to be rolled out in April 2017, the government is targeting higher revenue but a lesser burden for smaller traders and the common man.
In Nagaland, the current policies that the central government is implementing for a cash less economy and a unified indirect tax in the form of GST, it is expected that for the first time many of the local traders and entrepreneurs will be obligated to understand more about taxation. Nagaland being a state where the local inhabitants are exempted from paying income tax has over the years been incorrectly interpreted by many that there are absolutely no tax in the state. This very understanding is actually nullified by the presence of the taxes department led by the office of the Commissioner of Taxes in the state but the aptitude to pay tax has till now escaped most of the locals and it is also a reason why many successful entrepreneurs do not have the hard proof of the annual turnovers and growth over the years since they did not file the same with the taxes department. This is one way of legitimising the money that one has in cash or in the bank and proof of the success of one’s enterprise especially for a people who are not required to pay income tax. With digital payments the government will also be able to monitor every transaction and ensure that all applicable taxes are levied. This in turn might just usher in an era of the best tax collection in the state and the current revenue through tax might just double.
