Beacons of Business - 4

May 9, 2005

"We used to have perpetual complaints from our employees about the salary

structure and how much they had to pay in taxes. They would compare with their

friends in other companies and tell me that other companies were giving their

employees a lot of cash payments, which allowed them to avoid paying taxes.

However I knew that this was not legal and told them that they must pay the

taxes that they are supposed to pay.

To make the employees appreciate our stand, I requested a senior income tax

official to come and give a presentation to our people. One of the employees

told the official that he knew of a company that was giving cash payments so

that the employees could pay less tax. The IT official was quick to say that if

he could get the details, he will check it out and if necessary take immediate

action on the company. He assured us that we at Infosys were doing the right

thing. He also told them that they were earning top wages, and therefore they

should rightfully pay their taxes as their duty.

The employees continued to come to me and complain that if they paid so much in

taxes it was just going to support a corrupt government. I continued to tell

them that they must pay their proper taxes and if they had complaints about the

governance issues or how the taxpayers' money is being used, they must go to

those forums and see if they can help to correct that situation. I told them

that they must not shy away from upholding their responsibility to pay their

taxes. I told them not to mix up the two. I believe in integrity and openness,

and this is how I handled this situation"

--- N. S. Raghavan, Founder Director, Infosys, Bangalore, India

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