Good taxpayers promised customer status in revamped system

The Tax Administration Reforms Commission (TARC) will offer preferential treatment to ''good taxpayers'' and ensure that they are treated as valuable customers of the revenue department, the commission's head Parthasarathi Shome said on Monday.

The TARC has been set up to identify and remove ''daily barriers and obstacles'' faced by taxpayers and arrive at a critical mass of administrative steps needed to strengthen the tax system.

It will recommend ways to enforce a better tax system in terms of size, segment, nature of taxes and taxpayers needed to encourage voluntary tax compliance.

Efforts will be taken to remove the ''small irritants'' so that small taxpayers ''cheerfully'' comply with the tax provisions, Shome said, adding that the commission will focus on small tax payers as well.

''We are very much focused on small taxpayers. We will only have to sharpen our responses to small businesses,'' Shome said, indicating that TARC measures were unlikely to only focus on large taxpayer.

It will review the existing mechanism and recommend measures to enhance tax prediction predictive analysis to detect and prevent tax and economic offences, said an official statement.

The TARC will also look for ways of strengthening inter-agency information sharing between Central Board of Direct Taxes (CBDT), Central Board of Excise and Customs (CBEC), Financial Intelligence Unit (FIU), Enforcement Directorate as also the banking and financial sector.

The commission will be supported by a secretariat and will have its headquarters at Delhi. It will be provided information and quantitative data of CBDT and CBEC to do statistical analysis for making recommendations.

The TARC has been asked to submit its first report in six months. The commission will report on various identified issues every subsequent third month, Shome said, adding that it would soon chalk out a strategy on the focus areas of the first report.

In the first report, TARC intends to come out with an ''overarching'' summary of the likely work programme of the commission besides presenting some ''immediate ideas'' that could be implemented, he added.

''There will be some small steps that will come in the first report. We will certainly look at structural administrative reforms in the subsequent reports,'' he added.

TARC, he said, would benchmark the current tax administration procedures with those of emerging economies such as Brazil and Thailand as part of its efforts to strengthen the tax system that reflects global best practices.

Shome, however, ruled out benchmarking Indian tax procedures with those of the OECD countries or China where the tax administration is far advanced and computerised.

For India, the ideal benchmarking will be Brazil, Thailand and even to some extent South Africa, Shome added.

The other members of the commission are Y G Parande, Sunita Kaila, M K Zutshi, S S N Moorthy, M R Diwakar and S Mahalingam. The commission will meet again tomorrow.