Shome to head panel on tax policies

Parthasarathi Shome, Advisor, Union Finance Minister, Ministry of Finance (left) and D.K.Srivatsava, Former Director, Madras School of Economics at the R.Venkataraman endowment lecture held in Chennai on March 11, 2013. File Photo: S. R. Raghunathan

The government, on Monday, set up a seven-member panel under the chairmanship of Parthasarathi Shome to revisit tax laws and recommend measures for putting in place a stable and non-adversarial tax administration.

Following Cabinet approval earlier this month, the setting up of the tax panel with a tenure of 18 months marks compliance of Finance Minister P. Chidambaram’s budget proposal this fiscal “to set up a Tax Administration Reform Commission (TARC) to review the application of tax policies and tax laws and submit periodic reports that can be implemented to strengthen the capacity of our tax system.”

Apart from Dr. Shome as Chairman in the rank of Minister of State, the TARC, with two full-time members — Y. G. Parande and Sunita Kaila — and four part-time members — M. K. Zutshi, S. S. N. Moorthy, M. R. Diwakar and S. Mahalingam — is expected to suggest various measures, including appropriate organisational structure for tax governance.

As per the terms of reference of the TARC numbering over a dozen outlined in an official statement here, some of the major tasks entrusted to the Commission are to review the existing mechanism of dispute resolution covering time and compliance cost and recommend measures for strengthening them for both domestic and international taxation.

Besides reviewing the existing mechanism and suggesting measures for deepening and widening the base of tax and taxpayers, the Commission will recommend a system to enforce better tax compliance — by size, segment and nature of taxes and taxpayers, that should cover methods to encourage voluntary tax compliance.

The TARC will also recommend measures for strengthening the database and inter-agency information sharing, not only between the Central Board of Direct Taxes and the Central Board of Excise and Customs but also with the banking and financial sector and other agencies such as Central Economic Intelligence Bureau (CEIB), Financial Intelligence Unit (FIU) and Enforcement Directorate to ensure better tax compliance through sharing of such data.