PM Modi Launches Transparent Taxation To Reward Honest Taxpayers

The platform is aimed at easing compliance and expediting refunds, benefiting honest taxpayers of the country, whom he has extended thanks to, formerly for helping the government finance welfare programs. Finance minister Nirmala Sitharaman, minister of state for finance Anurag Thakur, along with other officials, business representatives, and chartered accountants attended the launch of the scheme.

As declared by Narendra Modi, three main features of the platform are faceless assessment, faceless appeal, and taxpayers' charter. He also mentioned that the emphasis is on making the tax system people-centric and public friendly, “banking the unbanked, securing the unsecured, funding the unfunded, and honoring the honest.”

The four factors responsible for changes in the taxation system were policy-driven governance, belief in people's honesty, the use of advanced technology, and efficiency in bureaucracy. "Where there is complexity, there is a problem in compliance," added the Prime Minister.

While honoring the role of honest taxpayers in the country, Modi said, “When the life of an honest taxpayer of the country becomes easy, he moves forward and develops, then the country also develops and leaps forward."

In June, PM had expressed his gratitude to all the taxpayers for helping finance the humanitarian measures during the coronavirus pandemic and farmers for helping fill the granaries. Last week, Nirmala Sitharaman, minister of state for finance, had mentioned that the Modi administration’s approach to taxation will be based on trust and esteem to the taxpayer and that the schemes rolled out with this philosophy will be scaled up.

The current administration has persistently been criticized on the issue of taxation, in spite of the genuine attempts at improving the tax structure. India's tax administration has been publicly known for tax harassment, where overzealous well-intentioned officials while raising tax revenues, have reduced growth and at times, done more damage than good.

The government has introduced a faceless income tax assessment to leave no room for corruption and overreach by officials. The controversy of alleged tax harassment by officers acquired much attention in India after the suicide of VG Siddharta, the founder of India's largest coffee shop chain in July, who left behind a note accusing tax authorities of persecuting him.

Tax officials are expressing their displeasure with the new faceless tax assessment program. They see problems in the lack of consultation and inadequate resources to implement the changes, a letter reviewed by Reuters shows.

A joint letter was sent to the Central Board of Direct Taxes (CBDT) this month, by representatives of the Income Tax Employees Federation and the Income Tax Gazetted Officers' Association who voiced their resentment.

Tax officers told Reuters that due to faceless tax assessment, tax collection may be reduced and it would raise pressure on officers that are under stress to meet high tax targets for the current fiscal year.

"We express our strong displeasure on this type of unilateral decision-making as it is not in the interest of the efficient working of the Department," the letter read.

Nirmala Sitharaman stated, “Today is the landmark day in the history of the taxation administration. The launch will bring certainty of information."

"The CBDT has given a framework and put in place a system in the form of this platform, a transparent efficient and accountable tax system," she added. The platform will use technology such as data analytics and AI.

“This adds strength to our efforts of reforming and simplifying our tax system. It will benefit several honest taxpayers, whose hard work powers national progress,” PM Modi had earlier said on Twitter.

Since 2014, there have been steady attempts at upgrading the tax administration. The launch of the platform carries forward the journey of direct tax reforms, following the several measures that have been taken by the CBDT to aid taxpayers. The current number of taxpayers in the country is significantly low: 1.5 crores. The focal point of the tax reforms has been no diminution of the tax rates and on simplification of direct tax laws.