FM asks for better information system to improve tax collection

New Delhi: Finance Minister P Chidambaram on Wednesday made a case for improving tax information system to augment revenue collection while committing to establishing a stable tax regime .

“Our focus is always to have a reasonably stable tax regime which is in the interest of both the tax payers as well as tax collectors,” he said at the Consultative Committee meeting attached to the Finance Ministry.

He emphasised the need for systematic changes including strengthening of the tax information system for better collection of taxes.

[caption id=“attachment_564011” align=“alignleft” width=“380”]  At present, there are 3.5 crore people filing income tax returns. AFP[/caption]

The government, he said, is fully committed to provide best possible facilities to the tax payers for better tax compliance and revenue augmentation.

More from Economy

Inflation likely to be a big focus area for budget 2024, say sources Explained: Will the Bank of Japan break tradition and raise interest rates?

At present, there are 3.5 crore people filing income tax returns.

Only 14.6 lakh people have declared their income of Rs 10 lakh and above for tax purposes which is not realistic, he said.

Noting that country has moderate rate of income tax as compared to various developed countries, he said “there is lot of scope for better tax compliance and tax collections.”

The peak rate of taxation is 30 percent at present.

Highlighting that about 50 percent tax payers are filing their return through e-mode, the Finance Minister said there is a need for more and more tax payers to electronically file their return as it well help in expediting tax processing and refund process.

The target for collection of direct taxes for the current fiscal is fixed at Rs 5,70,251 crore, he added.

The Finance Minister informed the members that department had refunded Rs 57,000 crore till this time during the current fiscal against Rs 70,000 crore in the same period of the previous fiscal.

The meeting, which was attended by Members of Parliament and secretaries in the Ministry of Finance, also discussed measures for improving relationship with tax payers.

Some members highlighted the need for keeping the tax rates low for better compliance while some suggested that interest on refund may be paid at least at the bank rate of interest.

PTI