The newly set up Tax Administration Reforms Commission (TARC) will seek to remove “daily barriers and obstacles” faced by taxpayers as part of its attempt to identify the critical mass of administrative steps required to strengthen the tax system.
The TARC will look to ring-fence “good taxpayers” and ensure that they are treated as valuable customers of the Tax Department, Parthasarathi Shome, who heads the Commission, said here on Monday.
The tax administration would be revamped to treat taxpayers as customers. Efforts will be taken to remove the “small irritants” so that small taxpayers “cheerfully” comply with the tax provisions.
“We are very much focused on small taxpayers. We will only have to sharpen our responses to small businesses,” Shome said, indicating that TARC measures were unlikely to only focus on large taxpayer.
The TARC has been tasked to submit its first report in six months time. Reports on various identified issues will follow every subsequent third month.
Shome said the Commission would soon chalk out a strategy on the focus areas of the first report.
In the first report, TARC intends to come out with an “overarching” summary of the likely work programme of the commission besides presenting some “immediate ideas” that could be implemented, he added.
“There will be some small steps that will come in the first report. We will certainly look at structural administrative reforms in the subsequent reports,” he added.
As part of its efforts to strengthen the tax system that reflects global best practices, the TARC would benchmark the current tax administration procedures with those of emerging economies such as Brazil and Thailand.
Shome also ruled out benchmarking Indian tax procedures with those of the OECD countries and also China.
China’s tax administration was already “far advanced” and had been modernised and computerised long back, he pointed out.
For India, the ideal benchmarking comparables will be Brazil, Thailand and even to some extent South Africa, Shome added.
The entire TARC team, comprising two full-time members and four part-time members besides Shome, met the Finance Minister, P Chidambaram, soon after their first ever meeting. The term of the Commission will be 18 months.
Shome said TARC would invite stakeholder comments and was likely to visit majority of metropolitan centres to interact with taxpayers.
S.S.N.Moorthy, former CBDT Chairman and now part-time TARC member, said the Commission would look to suggest measures that would ensure a tax administration in tune with modern times.
M.K.Zutshi, former CBEC Chairman and now part-time TARC member, noted that both taxpayers and tax collectors were somewhat dissatisfied with the current tax administration regime. “Our effort will be to arrive at an administration that will be cheerfully accepted by both tax payer and tax collector and minimise litigation. There should be lot more voluntary compliance”, he said.
S.. Mahalingam, former Chief Financial Officer of software major Tata Consultancy Services and now a part-time TARC member, highlighted industry’s concerns about the need for clarity in tax laws and adherence to specified time limits.