FM's day Out with his Taxmen - All Praise for the CBDT but wants them to collect a little more than targeted 4.3 Lakh Crores
THE FM is always at his sartorial best, but while addressing the Chief Commissioners and DGs of Income Tax, yesterday, he was at his oratorical best.
Pranab Babu addressing the CCs and DGs of Income Tax – CBDT Chairman Moorthy and Revenue Secretary Mitra keenly listen.
TREMENDOUS growth in Tax Collections: He was happy with the growth rate of 24 per cent in tax collections in the last five years. This tremendous growth has been made possible not only due to rationalisation of tax structure and improvement in tax administration leading to better tax compliance, but also persistent and unrelenting efforts of employees of the Income Tax department.
Simple Tax Laws: To improve compliance further, tax laws need to be simple, stable and robust; tax rates should remain moderate; and multiplicity of tax exemptions and deductions should be gradually phased out in order to widen and deepen the tax base. Tax administration needs to be further toned up by appropriate use of technology on the one hand, and improving professional competence and responsiveness of the employees on the other. [Who should do this? Apparently the Minister himself.]
New Direct Taxes Code - Legislation for the 21st Century . - Its draft is under revision, taking into consideration the areas of concern expressed by various stakeholders, and the discussion paper will be shortly in the public domain before introduction in Parliament in the forthcoming monsoon session. It will indeed be legislation for the 21st century, which will witness the emergence of an economically strong and vibrant India. The transition from existing law to DTC would require completion of delegated legislation in a time bound manner. CBDT should ensure smooth transition by planning the activities schedule well in advance.
Get our Due Taxes: The GDP is poised to grow at 8.5 percent during 2010-11. Sectors of the economy performing well should be monitored for tax compliance and we should get our due taxes. The department should also make attempts to widen and deepen the tax-base further. It should improve utilization of information relating to high value transactions available through Annual Information Returns (AIR), Central Information Branches (CIB) and other sources.
Satisfied workforce: I am happy to announce that Advanced Mid-Career Training Programme (AMCTP) for IRS officers would be started during the current year. A satisfied work force is the backbone and strength of an organization. We have modified the transfer policy for the Indian Revenue Service (IRS) officers to improve satisfaction levels and minimise unwarranted service litigation with our own employees. The Standing Committee on Finance, in its report for 2009-10, has expressed concern about shortages of manpower in the Department. This needs to be addressed urgently, especially in the face of the exponentially increasing workload, and the challenges of maximising revenue generation along with efficient taxpayer service. I am told that cadre restructuring of CBDT is pending for quite some time, which has adversely affected the implementation of core areas of work in the Income Tax department.
Rising Litigation: The rising litigation with the taxpayers and the quantum of revenue locked in appeals is a matter of serious concern. The strengthening of Settlement Commission, setting up Dispute Resolution Panel ( DRP ) may address the litigation issues with the taxpayers to some extent. I am told that under mutual agreement procedure (MAP) negotiations under Indo-USA DTAA a tax demand of Rs.800 crore in 48 cases has been confirmed. This is a good development and tax-payers should be encouraged to invoke MAP, which has emerged as a preferred alternate dispute resolution mechanism. In spite of these efforts, we need to develop more strategies to reduce the litigation with the taxpayers. I would like CBDT to come out with a comprehensive proposal to address the issue of unwanted litigation with taxpayers and also to realise locked up revenue in appeals. [Mr. FM, in most of the litigation, there is no revenue for the government – it is only revenue for the consultants]
Income Tax Welfare Fund: The Fund has a corpus of Rs . 100 crore kept in interest-bearing deposit. The interest earned annually on this deposit, and other annual accruals to the Fund, will be available for welfare activities of employees of the Income Tax department. I am sure that CBDT will come out with innovative welfare measures, which will further motivate employees of the Department to excel in their area of work.
Yet another conference is over – the FM has delivered an inspirational lecture patting the CBDT [most probably the speech is prepared by CBDT ]. And everybody is back to business; the poor FM is made to believe that there is lot of money locked up in litigation – there is only litigation; no money!