A Nation is an entity which binds different section of people together. It is responsible for all the redistribution and generation of wealth, providing basic services, providing security and so on. In return, it asks for two things from the citizens: either military services or taxation. However, modern states are more concerned about taxation.
As artillery, airplanes, tanks have replaced the man-power in the military. The major obligation remain is taxation. But that too is not fulfilled by the modern day people.
Consider India. Out of 1.25 billion population, only 1.5% population pays direct taxes. This not only leads to revenue loss(tax to GDP ratio India~16% as against OECD~34%) but also intensify inequality. This is because the government has to raise money and it does so by indirect tax rates. These taxes are applied on goods and services and paid by all. So the way out is to increase the tax base for direct taxes.
After talking to a number of people, I found out that people are driven by the belief that money collected is not used and only fill up pockets of babus and politicians. The pathetic level of infrastructure, lack of public service has made this belief even stronger. So, one can argue that when people would visibly see development taking place, they would pay. This argument is validated by economic survey 2016 and 2017.
But what about short-term measures?
A shortcut can be associating any visible and tangible public services to only those who pay a certain amount of taxes. One has to change the above belief that paying taxes results in no good. A case can be made for USA, where services like primary schooling receive exemption to those who pay taxes.
Further small peer groups (district wise) can be publicized. When a neighbor sees a person paying taxes and enjoying benefits, he would also be encouraged for doing the same. This would create a system incentives, increasing the tax base.
Another problem is a vast number of exemption being made ranging from efpo contribution to insurance and others. Though these are made with a good intent and encourage saving, but leaves a lot of loopholes. Take the case of USA where tax compliance is nearly 87%, it only allows for single exception among many available. This lead to enough flexibility as well as compliance.
Finally, removing the fear factor while dealing with income tax department would go a long way improving the tax base. The fear essentially is driven by complex tax laws. People are scared that if they reveal anything any unprecedented amount of tax can be put on them.
In all improving tax base would not only go towards using legal instruments but would involve psychological as well as technological aspect too. It would be a herculean but an inevitable task toward India becoming a super-power.