4. Two Birds With One Stone
Everyone had gathered in the conference room.
Boss: …so the profit is going to be quite high this year. Now, as I said, I don’t want to show a high profit and pay away a lot as taxes. So any suggestions on how to bring it down a little?
Employee One (after a lot of thought): The old car sir; lets sell it real cheap and buy a new one in its place. That way we can write off the loss on sale of car to the profit and also claim depreciation on the new car.
Employee Two: If you’re buying something buy new computers. The systems we use now are really outdated. Of course we can sell the old systems and charge the loss on sale to the profit. The depreciation claim will be higher too in case of computers.
Boss (slightly irritated): Well, what do you want to buy?
Employee Three: I don’t think this buying and selling will work sir. I’m sure the tax officer will be able to see right through our scheme. If we want to dress up a profit and loss account the best thing would be to go to the professionals about it.
Boss: Ah, someone is talking sense at last! Well, what do you suggest we do?
Employee Three: You should meet a Chartered Accountant, sir and discuss what we can do to raise the profit a little.
Boss: Raise? You mean reduce.
Employee Three: No sir I mean raise. If you spend two hours with a Chartered Accountant he will raise a splendid bill for consultancy fee. When we charge that to the profit it will be so low that we will be worried to bring it back to normal. So instead of taking a second consultation and a second bill for asking how to raise the profit it would be better off to ask in the first consultation itself about raising the profit. We can follow his advice after we have reduced the profit by charging his bill. It’s hitting two birds with the same stone.
Boss: Splendid! How did you think of this? All this while I was thinking that you were the most silly of the three!
Employee Three: Experience sir. Yesterday I heard you talking on phone about high profits and guessed what the discussion would be about today. I thought I would impress you with good suggestions to bring down profits and met with a Chartered Accountant. We spoke a lot. I didn’t understand most of what he said but do you know how much he charged me for the hour? You’ll be shocked!
-Ashok Sri Krishna