I think you're mistaken. Tax evasion is rampant because enforcement is hard. Salaried people are taxed at source, so there isn't too much evasion there. Similar

I think you're mistaken. Tax evasion is rampant because enforcement is hard. Salaried people are taxed at source, so there isn't too much evasion there. Similarly your big retail chains don't evade VAT because they're easy pickings for the tax authorities. Non-salaried people, small-time business persons etc. evade tax because there isn't really a paper trail of their earnings, and also because complying with tax laws is a massive pain in terms of effort and bookkeeping. In the rural areas, nobody even bothers because it's simply not worth the effort. > To which I say, perhaps the main reason for rampant scams and bribery is that taxes are evaded and these public employees are paid poorly. Not really. India is a poor country and public employees are paid well-above the median income. Even the lowest level of public employees - sweepers, janitors and the like make more than 2.5X the median income. [1] And bureaucrats who are worth bribing get well more than that. Corruption in India and most other developing countries is a prisoner's dilemma type of situation. Each individual benefits from being corrupt and there is significant improvement in quality of life if you earn $1200 a month instead of $900 month. So they choose to be corrupt and this is more or less a rational decision. It isn't an easy problem to solve, especially in the current world order with restrictive immigration practices. [1] http://latestjobsingovt.com/freshers/peon-watchmensweeper-jobs-in-karnataka/ http://latestjobsingovt.com/freshers/peon-watchmensweeper-jo...