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Eunuchs cash in where tax collectors failed

If you thought the IRS was pushing the tax collection envelope by hiring private debt collectors, think again.

India's newest tax collectors are eunuchs.

Dressed in bright saris and dancing and singing to the beat of drums, the newest government agents were dispatched last week by the Municipal Corporation of Patna to collect unpaid city taxes from businesses.

India_map_2_1According to the Times of India, the eunuchs were quite successful. The paper reports that despite the ire of many businesses, the group of about 20 eunuchs did what substantially more official tax collectors could not do in months: they actually got people to pay up. Last Wednesday, their first day on the job, they collected 425,000 rupees ($9,240) from shop owners.

Not bad, but they've got a way to go.

Of Patna's nearly half million residents, officials say only about 2,000 regularly pay property taxes and water charges. Tax collection has slipped to 200 million rupees ($4.34 million) a year from the anticipated 700 million rupees ($15.2 million).

Still, any collected money is welcome. Bharat Sharma, a revenue officer, told reporters that the government was very pleased and the eunuch's collection efforts will continue. "We are confident that their reputation and persuasive skills will come in handy for the municipal authorities to collect taxes from defaulters," Sharma told the Associated Press.

Because of the success in collecting business taxes, the eunuchs will soon be expanding their efforts to private homes.

Similarities to U.S. privatization: Both the American and Indian outsourcing efforts share some similarities. You can make your own jokes, as I want to keep the blog as family friendly as possible.

In both the U.S. and India, there are limits to the private collectors' roles.

Agents of the three U.S. collection firms cannot take enforcement actions, such as liens, seizures or levies, or take other any inherently governmental action. In India, the eunuchs are accompanied by government revenue officers who actually settle the outstanding tax bills.

And like the U.S. collectors, India's eunuchs work on commission.

The American debt collections get up to 24 percent of the tax bills they bring in. The Indians get no salary, and instead work for a 4 percent cut of the amount they collect.

Nothing new: Last year, officials in the southern India city of Andhra Pradesh hired drummers to play nonstop outside the homes of property tax delinquents until they paid up (blogged here). And during last year's holiday season, tax inspectors clad in Santa Claus outfits were deployed in Buenos Aires to try to encourage reluctant taxpayers to cough up what they owe (blogged here).


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