Income tax officers are awaiting the day when Finance Minister P Chidambaram approves a proposal to earmark 1 per cent of annual direct tax collections for meeting the annual expenditure of the Central Board of Direct Taxes (CBDT).
With direct tax collections expected to gross Rs 300,000 crore in 2007-08, the CBDT can expect around Rs 3,000 crore to meet its annual expenditure and for improving the tax administration structure of the country, when the proposal is sanctioned.
Income tax officials say the money would go a long way in improving their work practices, while enhancing their quality of life. The finance minister has given his in-principle nod to giving us 1 per cent of annual tax collections. Formal approval is awaited, an income tax official .
DIRECT TAX COLLECTIONS AND EXPENDITURE (Rs crore)
Total collections (1)
Total expenditure (2)
(2) as a % of (1)
Tax officials say they are poorly paid and need better facilities to keep up their good work in collecting taxes.
Direct tax collections have touched new highs, growing at 42 per cent during the current fiscal year. Even in 2006-07, tax collections grew by 40 per cent due to better tax administration and a buoyant economy, the official added.
Since January 1964, the CBDT has been entrusted with all matters relating to direct taxes. The organisation is part of the Department of Revenue in the finance ministry and is responsible for both tax policy and planning, besides administering direct tax laws through the Income Tax department.
The sanctioned staff strength (across the four groups A,B,C,D) is around 61,000, of which the top tier, group A, comprises around 4,100 officers, drawn mostly from the cadre-based Indian Revenue Service (IRS).
At the very top of the CBDT is the seven-member board, headed by a chairman, and assisted by joint secretaries, directors, deputy and under secretaries, besides other ministerial staff.
A Chief Commissioner/Director General of Income Tax (part of Group A) has a pay scale of Rs 22,400-24,500, besides other allowances and perks. A level below (Group B) are income tax officers who are in the pay scale of Rs 7,500-12,000, besides getting other allowances and perks.
Income tax officials have also approached Chidambaram with the request that the CBDT be granted full financial autonomy, somewhat on the lines of what the Railway Board enjoys.
The demand is premised on the grounds that even routine expenditure in the CBDT is subject to bureaucratic processes and controlled by a director-level junior officer in the Department of Expenditure under the finance ministry.
Pointing out the differences between them and their railway counterparts, income tax officials say the CBDT chairman should be the rank of a secretary to the Union government, while members should be given the rank of special secretary.
In order to buttress their case for better pay and bureaucratic parity, income tax officials point to their success in reducing the cost of collecting taxes.
According to them, only 0.59 per cent (around Rs 1,360 crore) of the total direct tax collection of Rs 2,30,091 crore in 2006-07 was spent on collecting the taxes. From 1998-99, the cost of collection has been steadily declining from 1.83 per cent then to current levels.
As against this, direct tax collections, as a percentage of GDP, are growing steadily and are likely to be around 6.5 per cent in 2007-08, up from 5.58 per cent the year before.
While no one would grudge India's tax administrators and other government officials better pay and facilities, itself the subject of ongoing discussions in the 6th Pay Commission, a contrarian view suggests that tax officials also need to improve their dealing with tax payers.