Chidambaram for higher tax collection

Asks CBDT to work on a substantial upward revision in the target

NEW DELHI: Enthused by a 36.6 per cent increase in net direct tax collections in 2007-08, Finance Minister P. Chidambaram on Monday directed the Central Board of Direct Taxes (CBDT) to work on a substantial upward revision in the mop-up target as estimated in the budget for the current fiscal.

Briefing newspersons after inaugurating a two-day annual conference of the Chief Commissioners of Income Tax here, Mr. Chidambaram said the budget estimate for revenue collection through direct taxes in 2008-09 could be increased substantially from Rs 3,65,000 crore to over Rs. 3,92,000 crore.

“The estimate will no longer be Rs. 3,65,000 crore. The CBDT will meet over the next couple of days and increase the estimate upwards…Even if you take a 25 per cent increase over the last year collection of over Rs. 3,14,468 crore, the budget estimates must be revised upward very sharply,” he said.

A 25 per cent growth over last year’s collection would raise the direct tax collection estimate to over Rs. 3,92,000 crore, he noted.

To a query on his optimism on the tax collection front, despite inflationary pressures and consequent fear of a slowdown in economic growth, he said: “every estimate says that economy will still grow at 8.5 per cent this fiscal.”

Referring to non-compliance of rules pertaining to tax deduction at source (TDS) by some Ministries, he said: “We are not happy with TDS in the Defence and Railways Ministries. We are taking steps to sensitise the authorised deductors in the government sector to comply with law and improve the TDS.”

He noted that there would be a marked improvement during the current fiscal as steps were being taken to work with the Ministries on this front.

On tax evasion, he pointed out that henceforth, during a search or survey, if a person is found to have stopped filing returns for the past three years or had never filed a return, “invariably such a case will be taken up for prosecution”. Directions have been issued in this regard.

On the 360-degree profiling of tax evaders announced last year, he said that information from all sources – from the Customs and Income-Tax Departments, the CBI and through successful searches – was being used to prepare profiles of known tax violators.

As for the proposed Income Tax Code, which is to replace the Income Tax Act, he said the code was ready. “[The] Discussion Paper is being written.”

Hailing the I-T Department for a record mop-up in taxes, Mr. Chidambaram said that during the UPA government’s four-year rule, the collections tripled from Rs. 1,05,088 crore in 2003-04. Alongside, the cost of tax collection also declined to 0.54 per cent, the lowest in any jurisdiction in the world. This performance would fetch the department a bonus of about Rs. 400 crore. The government was stressing on voluntary tax compliance and the fact that it was paying off reflected in the increase in TDS (51 per cent), advance taxes (33.6 per cent) and self-assessment tax (62 per cent) last fiscal.

Source: http://www.hindu.com