The tax administration should progress from a position of the sovereign right to revenue to that of a public service oriented facilitator of the taxpayer and protector of his rights.

Collection of revenue, driven solely by rigidly mandated targets should be eschewed.

The complex web of intricate regulations and procedures and poorly drafted and ill-considered laws that have led to uncertainty in business climate and unwarranted risk in economic activity must be quickly and steadfastly eradicated.

The practice of issuing ‘precautionary demands' as a counter to adverse views from the CAG has taken away the zeal to combat views opposed to that of an Assessing Officer (AO) from the tax administration, thus leading to lack of trust in the AO. Besides, senior officers seem to be aware of field practices and have instituted ‘vigilance' including anonymous tipping off to keep staff on their toes, but the result has been deep demoralisation at the lack of trust.

Reform must come from two directions. For taxpayers, the compliance costs have to be drastically reduced and some lightening of the most egregious taxes is called for. For tax officers, the inducements could be a hike in pay and bonuses reflecting performance. The criteria and modalities will have to be designed and spelt out, perhaps linked to quality collections. The objective has to be to get all stakeholders - tax officers and taxpayers - to operate in ways that promote the overall goals of efficiency and equity in tax collection by facilitating taxpayers with a customer focus while, at the same time, segmenting taxpayers to reduce tax evasion.