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Q. Rajasva Gyan Sangam: In the backdrop of recent Rajasva Gyan Sangam meet, discuss taxpayer-taxman relationship in the context of India.
Jun 18, 2016 Related to : GS Paper-3

Ans :

Introduction-

Recently the Central Board of Direct Taxes (CBDT) and the Central Board of Excise and Customs (CBEC) have jointly held Rajasva Gyan Sangam, the annual tax administration conference.

In the conference it was decided that Indian revenue authorities will work towards improving taxpayer services, increasing the tax base, checking tax evasion, reducing litigation and digitizing processes etc. Both arms of the tax department took a number of decisions to achieve these objectives.

Taxpayer-taxman relationship in the current context-

  • At present about 92% of tax revenue comes voluntarily from self-assessments, TDS and advance tax payments.
  • Just about 8% of tax revenue comes through scrutiny assessments, where the taxman needs to enforce the law, for that as many as 42,000 officers are on the job.
  • The above data shows that the proportion of honest taxpayers is considerably higher. There exists more scrutiny than required and often with harassment to collect just about 8% revenue at the cost of disproportionate time and effort spent on such scrutiny.

Reasons for such scrutiny-

  • India tax laws have of number of complex laws with numerous exemptions deductions.
  • Many times people do not understand provisions of these laws and many times such things lead to disagreements between taxpayer and taxman.
  • Also there exists widespread assumption among taxmen that all taxpayers are potential evaders and hence they view taxpayers with suspicion.
  • Hence such issues leads to widespread scrutiny, many times it converted to harassment for taxpayers.

How taxpayer-taxman relationship can be improved?

  • The complex tax laws should be simplified as much as possible. Even government should do away complex process by simplifying the norms.
  • Government must do away unnecessary exemptions and deductions by proportionally adjusting tax slabs and rates.
  •  Taxman should correct their attitude towards taxpayers and should stop unnecessary scrutiny and harassments to taxpayers.
  • The current trust deficit should be rectified by placing trust in the taxpayers.
  • Government should launch awareness campaign to educate people and to increase tax base.

Conclusion-

For any country, tax revenue vital for its administration. To improve tax revenue, there is need to improve tax base as well as relation between taxman and taxpayers. Recently concluded Rajasva Gyan Sangam has thrown light on it and tax authorities took number of decisions in this regard, which is welcome move.


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