Finance ministry restructures tax policy and data mining wings

To implement Shome panel suggestions on tax administration

The finance ministry has altered the structure of policy analysis and data mining wings of its tax department, in line with the recommendations of the Tax Administration Reform Commission (TARC), set up by the previous United Progressive Alliance (UPA) government. The move comes four weeks ahead of the Budget presentation in Parliament.

The tax department will now have Tax Policy Research Unit (TPRU)and Tax Policy Council (TPC) in place of Tax Research Unit and Tax Policy and Legislation.

The Tax Policy Research Unit will have economists, statisticians, operational researchers and legal experts.

The 10-member Tax Policy Council will be headed by Finance Minister Arun Jaitley and have minister of state for finance Jayant Sinha and commerce and industry minister Nirmala Sitharaman among members. The members will include secretaries of key ministries and departments such as finance, economic affairs, commerce, NITI Aayog, revenue, industrial policy and promotion, among others.

“TPRU will prepare for every tax proposal an analysis of legislative intent, expected increase/decrease in tax collection and economic impact,” said a finance ministry statement.

It will be headed by an officer of the level of chief commissioner at functional level alternatively from the Central Board of Direct Taxes (CBDT) and Central Board of Excise and Customs (CBEC) for a fixed tenure, who will directly report to the revenue secretary, the statement added.

TPRU will carry out studies on various topics of direct and indirect tax policies and prepare and disseminate papers on tax policy issues. It will also assist TPC, chaired by the finance minister, in taking appropriate tax policy decisions. The Unit will also liaise with state commercial tax departments.

The new arrangement is aimed at bringing consistency, multi-disciplinary inputs, and coherence in tax policy.

The disconnect between the tax policies of CBDT and CBEC has been a key issue of concern, which will be addressed through the decision. The move will sync the tax policies of the two boards to the larger benefit of the ministry of finance and tax payers as a whole.

Sunil Shah, partner, Deloitte Haskins & Sells, said: “The step will enable the government to take an integrated view of direct and indirect taxes and obtain inputs from a broad spectrum of professionals. This will help in the formulation of balanced and forward-looking tax policies.”

TARC, headed by Parthasarathi Shome, a former adviser to the finance minister, had recommended establishing a Tax Council supported by a common tax policy and analysis unit to cater to the needs of both direct and indirect taxes.

For every tax proposal, TPRU will prepare an analysis covering three broad areas - legislative intent behind the proposal; expected change in tax collection; and the likely economic impact through the proposal.

Besides, the Tax Policy Council will look at all the research findings of TPRU and suggest broad policy measures for taxation.

WINGS REJIG

• The finance ministry has altered the structure of policy analysis and data mining wings of its tax department, in line with the recommendations of the Tax Administration Reform Commission (TARC), set up by the previous United Progressive Alliance (UPA) government
  

 

The move comes four weeks ahead of the Budget presentation in Parliament
 

The tax department will now have Tax Policy Research Unit (TPRU) and Tax Policy Council in place of Tax Research Unit and Tax Policy and Legislation
 

The Tax Policy Research Unit will have economists, statisticians, operational researchers and legal experts