Business Process Reengineering Project of Income Tax Department – hygienic toilets in IT offices
Background & Need for the Project: Collection of Direct Taxes which is administered by the Income Tax Department (ITD for short) has been growing at a very fast pace in recent years. Direct taxes collections in Financial Year 2007-08 stood at Rs. 3,14,468 Crores as against Rs 48,280 Crores in the Financial Year 1997-98. Similarly, the taxpayer base has also expanded and the number of tax payers at the beginning of FY 2007-08 stood at 3 Crores. This scenario coupled with globalization of the world economy (what does this mean? Just another jargon in reports!), reduction of trade barriers and technology enabled methods of conducting business has redefined the performance expectations from the ITD posing a challenge to its capacity and functioning as an efficient organization. A need was thus felt to critically review the existing functioning of the Income Tax Department. The Finance Minister in his budget speech of 2006 announced that IT Department will undergo business process re-engineering. A Directorate of BPR was accordingly created in May 2006 headed by an officer of the rank of Director General of Income Tax.
Through a global tendering process, M/s PricewaterhouseCoopers was appointed as external consultant for the BPR project. The Business Process Re-engineering exercise was conducted by the BPR Directorate with the objective of enabling the ITD to deal with the challenges emerging from the new work environment.
Objectives of the Project: The main objectives of the BPR project can be summarized as under:
• Re-evaluation of all current processes to remove the redundant and obsolete processes and redesign or create new processes which are more efficient and maximize use of resources to produce the best results
• Identification of stakeholder's needs and the ways in which the organization can meet them especially taxpayer's needs for information, convenience of filing tax returns & documents, payment of taxes and speedier issue of refunds
• Use best and leading practices of other organizations to develop milestones, objectives, targets to benchmark organizational performance
• Increase alignment between people, processes and technology
• Enhance employee involvement, skills and organizational creativity
Short Description of the Project: The project commenced on 1st May, 2007 and was completed with finalization of 18 reports covering more than 2000 pages within a timeframe of eight months. [All government projects end up in REPORTS!]
Outcomes: The Business process Re-engineering of the Income tax Department is first such project initiated by the Government of India where a comprehensive study of such a large Department has been undertaken and changes have been recommended taking a holistic view of the Department that would fundamentally change the way the Department functions in as much as all activities which do not require exercise of discretion in individual cases and are amenable to large scale automation will be dealt by Bulk Operation Division (BOD) where there will be no taxpayer interface. The creation of BOD would help in reducing the pressure on the inadequate manpower and infrastructure across various ITD offices by leveraging economies of scale and technology, thereby de-cluttering the office of the Assessing Officers and enabling them to better perform their compliance functions.
Recommendations focused on Taxpayer Services:
• Setting up a Directorate of Taxpayer Services to address the issues of taxpayer grievances and education. [Does it mean more jobs?]
• Additional channel for filing tax returns/documents at Facilitation Centres
• Ensuring that correct details payments are recorded and credited to taxpayer's account
• Effective recording/tracking of all taxpayer communications
• Ease of payment of taxes through ATM for individuals
• Call-centres to deal with taxpayer queries
• Automatic updating of address from returns in PAN/TAN database
• Functional segregation- IT enabled processes to ensure quicker processing/issue of refunds
• Use of SMS for information dissemination to taxpayers
• Better infrastructure facilities for taxpayer in ITD offices like waiting lounge, drinking water, hygienic toilet, etc.
Recommendations focused on Revenue augmentation
• Detect stop filers and non filers through use of 3 rd party and TDS data
• Non-intrusive Measures such as sending pre-populated returns to the tax payer in cases of clear and apparent mismatch of information given in the return and that available with the ITD to be settled by accepting payment of tax plus penal amount. Similarly, for a limited number of cases falling in a small band below the risk score at which cases are selected for scrutiny, total wealth statement to be called and kept on record.
• Work-flow based system of working with no option at any level to work manually
• Robust risk profiling system for selection of cases for scrutiny.
When is CBEC coming out with such a report?