PM Modi To Launch Transparent Taxation Platform On 13 Aug

Daniel Fowler
August 13, 2020

Prime Minister Narendra Modi on Thursday will unveil the next phase of direct tax reforms aimed at easing compliance and rewarding honest taxpayers, as the government looks to rebuild the pandemic-hit economy.

"The honest taxpayers of the country play a very big role in nation building". Faceless assessment and taxpayers charter has come into force from today.

However, the policy announcements must also reflect in the functioning of tax administration, tax officers need to be trained and focus needs to shift from merely raising tax orders to supporting taxpayers and truly streamlining assessments.

He said that the charter has been introduced with defined rights and responsibilities. The scrutiny by these officers will be reviewed by officers at another randomly selected location. It uses technology, data analytic and also uses artificial intelligence.

This, Modi said, will end the era of "jaan pehchan" (acquaintance) to get scrutiny or notices settled. It expects taxpayers to be honest and compliant, and pay taxes in time. Those capable of paying tax but are not in the tax bracket should come forward. Sometimes some decisions were taken under compulsion, sometimes some decisions were made under pressure, then they were called "reforms". "Reform is a continuous process".

Modi is of the view that the structural reforms will add a new dimension along with the transparent taxation platform. "There have been constant efforts over the last few years, '" said the PM while pointing to the junking of 1,500 outdated laws, a huge improvement in the ease of doing business and major changes in laws and rules.

"We brought in "Vivaad Se Viswas" scheme so that maximum cases get resolved outside court".

With the objective of enhancing the efficiency of the delivery system of the Income Tax Department, the government has amended the provisions of the Income-tax Act to mandate the Central Board of Direct Taxes (CBDT) to adopt a Taxpayers' Charter.

Also, the tax rate has been reduced.

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These have been moderated by the country's exam board, CCEA to ensure final grades are in line with previous years. This summer's exams were scratched by the government in March owing to the coronavirus pandemic.

In 2012-13, 0.94 per cent of all tax returns were scrutinised, said PM Modi, but in 2018-19, this figure came down to 0.26 per cent.

Modi pointed out that tax dispute appeals will also be faceless.

"Our effort is that our tax system should be seamless, painless, faceless", he said. Seamless means tax administration which should try to solve the problems of all taxpayers.

"Today is the beginning of a similar journey", he said. Meanwhile, in order to eliminate human interface, the Faceless appeal on the lines of Faceless assessment will be followed.

In a tweet, Sitharaman said, "Truly, this shall mark an important step forward in providing a simple and transparent taxation regime for India".

The government has undertaken various tax reforms during the last six years including a reduction in corporate tax last year from 30% to 22% for existing companies and 15% for new manufacturing units, scraping of dividend distribution tax and faceless assessment. Several measures have been taken to promote digital transactions and electronic modes of payment.

With a view to provide for resolution of pending tax disputes, the IT Department also brought out the Direct Tax "Vivad se Vishwas Act, 2020", under which declarations for settling disputes are being filed now.

"Compliance is also hard where there is complexity".

"The tax department has committed to treat every taxpayer as honest, unless proven otherwise, and provide fair, courteous and reasonable treatment, according to the taxpayers" charter adopted on Thursday.

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