Shome to head Tax Admin Reform Commission

The government on Monday said it had set up a Tax Administration Reform Commission, under the finance minister’s advisor, Parthasarathy Shome.

The commission, which is to review applications of tax policies and tax laws and give periodic reports to strengthen the capacity of the tax system, would have a term of 19 months.

Proposed by Finance Minister P Chidambaram in Budget 2013-14, the commission has Y G Parande and Sunita Kaila as full-time members, and M K Zutshi, S S N Moorthy, M R Diwakar and S Mahalingam as part-time members. Shome would be in the rank of minister of state.

“It would review the existing mechanism and recommend an appropriate organisational structure for tax governance, with special reference to deployment of workforce, commensurate with functional requirements, capacity building, vigilance administration, responsibility and accountability of human resources, key performance indicators, assessment, grading and promotion systems, and structures to promote quality decision-making at the highest policy levels,” the finance ministry said.

The commission would review the business processes of tax governance, including the use of information and communication technology and recommend measures for tax governance best suited to the Indian context. It would also look into the mechanism of dispute resolution covering time and compliance cost and recommend measures for strengthening the same.

Other terms of reference of the commission include recommending capacity building measures for preparing impact assessment statements on taxpayers compliance cost of new policy and administrative measures of the tax departments, measures for deepening and widening of tax base and taxpayer base, a system to enforce better tax compliance - by size, segment and nature of taxes and taxpayers, that should cover methods to encourage voluntary tax compliance.

It would recommend measures for improved taxpayer services and taxpayers’ education programme. This includes mechanism for grievance redressal, simplified and timely disbursal of duty drawback, export incentives, rectification procedures and tax refunds.

It would also suggest measures for strengthening of database and inter-agency information sharing, not only between the Central Board of Direct Taxes and Central Board of Excise and Customs but also with the banking and financial sector, the Central Economic Intelligence Bureau, Financial Intelligence Unit, Enforcement Directorate, and use of tools for utilisation of such information to ensure compliance.