Need to simplify tax system, lower corporate tax: CBDT Member
Giving a brief idea for the first time about the new Direct Tax Code (DTC), the Central Board of Direct Taxes (CBDT) member and also Convenor of the Task Force Akhilesh Ranjan on Thursday said the draft law focuses on improving litigation system and easing compliance among others.
He stated the main thrust of the draft DTC is on compliance, persuading the taxpayer to comply even further with the tax laws and building that relationship with the taxpayer where he feels that tax is no longer a burden.
"There are major recommendations on using technology to improve compliance, to provide better services and information to the taxpayer to in turn get better information from taxpayer. There are chapters on litigation management, and an attempt has been made to simplify computation of incomes, among various things, the whole structure which had become very complicated by adding on provisions," he said at an Assocham event.
The member of the apex tax policy-making body said that for improving compliance, the taxpayer must believe that the tax rates and structure is something which is reasonable and moderate.
"The moment he starts feeling that this tax is something which the government has the right to ask for, then compliance starts and that's the basic principle," he said.
Ranjan noted that there was need to look at the whole tax system to try and simplify it, make it more streamlined and effective. He also said the current corporate tax rate in the country is higher compared to many emerging economies.
"Corporate taxation in India at present is a bit higher than international standards, particularly when you compare with the emerging economies and with the neighbouring Asian and South-Asian economies, so reduction in tax rates is called for, a change in the way of corporate taxation is called for as there have been too many complexities introduced year after year," the senior tax official said.
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