Govt panel for tax administration reform set up

Business LineFile photo of Dr Parthasarathi Shome, Adviser to the Finance Minister. Photo: Ashoke Chakrabarty

As part of bringing in more credibility among tax payers and to streamline income tax procedures, the Government has set up a Tax Administration Reform Commission comprising officials from public and private sector agencies, Advisor to Finance Minister, Parthasarathi Shome said on Saturday.

“Here, we are not focusing on tax policy, legislation. But the focus is on the rules and features and structural reforms in tax administration. That work is going on very intensively (through this Commission),” Dr Shome said.

Dr Shome, who is also the chairman of Tax Administration Reform Commission (TARC), was speaking after releasing a book on service tax authored by P Rajendra Kumar, a member of Society of Auditors which has published it.

Elaborating on the Commission, he said that with the setting up of the Commission, the income tax department would be able to work out solutions for a good tax payer so that he does not get “hampered” while a poor tax payer was “targeted” and then an appropriate yardstick can be used (to collect the taxes from him).

Dr Shome said the Commission members comprise former chairmen of two tax boards, former Chief Financial Officer from IT service provider Tata Consultancy Services and an Ex-Vice President for Taxation from the Murugappa Group.

“It is a mixture of private and public sector. The first report by the Commission is supposed to be out by end of May and then in a years’ tenure it will give four quarterly reports,” he said.

Hopefully there would be dynamic recommendations and once the recommendations are out, it would be discussed by the tax administration and tax payers, he said.

“Under this process, we will be going to various metros and we have already met officers in Mumbai, Chennai, Bangalore and Kolkata. We are going to have such a meeting in New Delhi. We have also invited Chambers of Commerce, chartered accountants and tax advocates. So, their inputs are also coming in,” he said.

Dr Shome said one of the reasons for setting up the Commission was to bring in more transparency in the tax department and in the collection of taxes as a certain amount of “distrust” emerged between the tax department and the tax payers.

“One challenge remains and has emerged in the last five years or so, is that, even FM (Finance Minister P Chidambaram) also observed that a certain amount of distrust between tax payer and tax officer has emerged,” he said.