The Hindu Business Line : Govt for simpler tax system

THE Government is keen to move to a simpler information-based tax system over the next couple of years, the Revenue Secretary, Mr K.M. Chandrasekhar, has said.

"We want to move to a simpler tax system with understandable rules. It should not be legally complex. We are also working with the Central Board of Direct Taxes and the Central Board of Excise and Customs to develop necessary information systems. In the future, the departments would work with more intelligence by taking advantage of information systems," he told reporters on the sidelines of a conference on international trade organised by the Confederation of Indian Industry (CII).

Asked whether the Government was confident about meeting the budget estimates for tax collections for the current fiscal, Mr Chandrasekhar said that he would not like to take a call on the issue at this stage.

"I would not like to hazard a guess on whether we will meet the budget target or not. Currently, the personal income tax collections are below target. But there may be reasons to it like changes in slabs and tax rates. But collections are not too bad at this stage," the Revenue Secretary said.

According to the provisional figures available with the Finance Ministry, personal income tax collections grew 4.5 per cent till September 15 to touch Rs 16,311 crore. It has also collected Rs 800 crore towards fringe benefit tax (FBT) during the period and Rs 770 crore towards securities transaction tax (STT).

Corporate income-tax collections till September 15 stood at Rs 17,995 crore, against Rs 11,636 crore collected in the same period last year.

Mr Chandrasekhar, however, admitted that there was a problem on the issue of tax collections from oil companies. "The main problem is that the demand growth for petrol and diesel has been lower than the budgeted or expected level. If this trend continues, we may have to take a hit of Rs 3,000-4,000 crore this fiscal," he told Business Line.

While excise collections up to August 2005 stood at Rs 39,015 crore, customs duty collection during April-August stood at Rs 25,463 crore.

Asked what steps the Government planned to prevent excise revenue leakages, Mr Chandrasekhar said professional bodies like the ICAI and ICWAI were being roped in to strengthen the audit mechanism. "We are not looking at withdrawing any of the excise-duty related relaxations made in the past. But we want to strengthen the audit mechanisms," he said.

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