Finance Minister Pranab Mukherjee asked the revenue department to aim for a higher direct tax collection. The government had budgeted this year’s revenue collections at Rs 4,30,000 crore, against the revised target of Rs 3,87,000 crore last year.
“I do not want to burden you with a higher target this year. But, I would expect you to do your best and give me a little more than Rs 4,30,000 crore,” Mukerjee said while addressing the 26th Annual Conference of Chief Commissioners and Directors General of Income Tax.
In the last annual conference, Mukherjee had asked the tax officers to collect Rs 4,00,000 crore in direct taxes. However, the actual collections for 2009-10 stood at Rs 3,78,000 crore, lower than the revised estimate of Rs 3,87,000 crore, though higher than the budgetary target of Rs 3,70,000 crore.
The minister said, apart from concentrating on big cities and towns, the department should also look to smaller towns and cities for widening of tax base. To improve compliance further, he said, tax laws needed to be simple, stable and robust; tax rates should remain moderate. He added multiplicity of tax exemptions and deductions should be gradually phased out to widen and deepen the tax base.
Mukherjee said CBDT should consider hiving off its technology-driven taxpayer services to a Special Purpose Vehicle, which could better deliver such services in the public-private partnership mode. He also said the department should draw a road map for administratively meeting the challenges and the changes that would be introduced by the new Direct Taxes Code (DTC).
“The human resource directorate of the department should draw up plans for training, in cooperation with tax training institutes, for capacity building for implementation of the DTC. Transition from the existing law to DTC would require the completion of delegated legislation in a time-bound manner. CBDT should ensure smooth transition by planning the activities schedule well in advance,” he said.
For international taxation and to facilitate exchange of information, the government had set up two Income Tax Overseas Units at Indian Missions in Singapore and Mauritius. Eight more such units were also being set up on similar lines. Besides, under mutual agreement procedure negotiations under Indo-US DTAA, a tax demand of Rs 800 crore in 48 cases had been confirmed, he added.’