FM should focus non-adversarial tax regime in Budget: FICCI
January, 10th 2015
Jyotsna Suri, President of FICCI today has urged the Finance Minister, Shri Arun Jaitley, to make earnest efforts to move away from the aggressive revenue approach and provide a genuine on-adversarial and conducive tax environment for industry and the economy to flourish.
For creation of such an environment, Dr. Suri suggested few steps as given below:
• Revenue estimates and targets should be arrived at realistically in accordance with the state of the economy;
• Parameters for evaluating and reporting the performance of tax officers annually need to be revised. Revenue realized should not be a factor for appraising the performance of an assessing officer. Performance of the tax officers should be judged on the basis of the quantum and quality of different items of work rendered in all areas including assessment of traits like judiciousness and facilitation.
In the pre-Budget consultation with the Finance Minister, the FICCI President said, “The overwhelming focus of the Government machinery on revenue ‘Targets’ puts too much pressure on the tax officers to maximise revenue collections leading to arbitrary assessments, denial / delay in sanction of refunds, disputes and unwarranted litigation. Revenue generation is primarily dependent on the economic activity in the country; revenues cannot be enhanced by prescribing artificially high targets for the tax officers.”
Dr. Suri re-emphasised the need for bringing down t he high cost of capital which has emerged as a major hurdle in Indian industry’s competitiveness. “Reduction in interest rates will give a boost to demand (for housing and consumer durables) as well as investments (especially for MSMEs and entrepreneurship), which will have aspiralling effect on overall investment and growth cycle,” she said. With inflat ion under control, it is hoped RBI will now consider easing the monetary policy stance and bring down the interest rates.
FICCI also appreciates government’s efforts towards fiscal consolidation. It is expected that the report of Expenditure Management Commission will lay out a roadmap for rationalization of subsidies and curtailing non-productive expenditure. This will enhance the scope for more productive capital expenditure, especially for infrastructure, which will have a positive effect on economic growth and development.