India’s tax administration needs a mindset change

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Amid allegations of “tax terrorism”, finance minister Nirmala Sitharaman has sought a mindset change in tax officials while advocating a technology-driven approach. “Tax administrators have a very delicate role to perform. A mindset change is needed to cater to an informed citizenry,” she told a large gathering of tax department officials on Friday. Echoing PM Narendra Modi’s resolve of rolling out measures to ensure that honest taxpayers are not harassed, Sitharaman underscored curtailing the interface of taxpayers with authorities. “The use of technology and faceless assessment is the need of the hour in tax administration today,” the minister said. The comments at her first meeting with senior officials of income tax and GST wings in Gujarat came days after the revenue department mandated the use of unique document identification numbers to avoid misuse of official communication to harass taxpayers.

In an interview last week, Modi had said that the government will roll out measures to reduce harassment amid fresh complaints of intimidation and strong-arm tactics being deployed by tax authorities. These voices have grown louder in recent weeks after Cafe Coffee Day founder V G Siddhartha committed suicide and, in a purported note, accused harassment by a senior income tax officer. A top I-T official told TOI that Sitharaman stressed on creating a “taxpayer-friendly” environment. “The finance minister asked us to respect wealth creators and facilitate them by cutting down unnecessary procedural delays. She stressed us to remain more humane in our approach,” the official said. The minister’s remarks echoed that of PM Modi during his Independence Day speech on Thursday. Sitharaman later engaged in a detailed discussion with industry representatives. Briefing the press later, the minister said discussions with tax assesses should go smoothly.

“If information is needed, it must be a faceless process. There is no need for tax officials to visit the assessees. Instead, use technology to simplify the process so that repeatedly seeking information is not necessary,” she said. “As far as assessees and their issues are concerned, we must communicate with them and solve issues by treating them respectfully.” Recently, tax practitioners had made a representation to the PMO alleging harassment by I-T officials. When queried about periodic increase indirect tax collection targets in this regard, the minister said: “Targets are set following a lot of discussion and consultation. All regions are taken on board before fixing our targets. Particularly, I would like to underline that we’re not overstretching ourselves,” Sitharaman added. She said that the department would soon come out with a solution to the problem of delayed reflection of tribunal judgment in favor of the tax assessee in his or her I-T returns.

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