FinMin moots reforms within tax department

Interdepartmental transfers, change in appraisal policies expected

NEW DELHI: After switching the GST refund mechanism to online and introducing Document Identification Number (DIN) to render the tax collection and refund processes more transparent, the Central government is now considering some bold reforms in the tax department. This includes interdepartmental transfers and lateral hiring, to boost transparency as well as efficiency of tax officials.

“In the last few weeks, the government has already taken bold reforms — not just in cutting tax slabs, but also making the process digital to ensure transparency and curb corruption. However, there is a need to revamp processes including those related to appointments, appraisals and transfer policies to make the whole system better,” a senior finance ministry official said.

The government is also considering lateral hiring; better synchronisation between other agencies such as Enforcement Directorate, Directorate of Revenue Intelligence and Serious Fraud Investigation Office; and a more efficient appraisal process to make the taxmen perform better.

“The tax department needs to work in better synchronisation with investigative agencies in order to help speed up procedures in corruption cases. So, allowing lateral hiring and interdepartmental transfers can help in understanding the larger ecosystem. Also, a new appraisal system is under consideration, which will take into account tax litigation, efficient revenue collection and also revenue intelligence,” the official added.

The proposed reforms are currently in the discussion stage and will take shape in next two to three months.
Tax reforms had been a long-pending issue before the Union Finance Minister Nirmala Sitharaman, who, following a series of consultations with tax officials across the country, has already taken several decisions including online GST refund mechanism and launch of DINs to make the tax assessment process transparent. On Tuesday, the first day of the launch of the system, the government generated as many as 17,500 DINs. Now, any communication issued by the income-tax department will have a DIN to ensure an audit trail.

Cleaning  up the tax department
Immediately after coming back to power, the current government has compulsorily retired 64 high-ranking tax officers from both Central Board of Direct Taxes (CBDT) and Central Board of Indirect Taxes and Customs (CBIC) — many of them commissioner-level officers — on charges of corruption, smuggling and even criminal conspiracy.

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