Speaking to reporters after inaugurating the conference of the chief commissioners of income tax (I-T ) on June 9, 2008, the finance minister P Chidambaram proudly announced the figures of income tax collections for the financial year 2007-08 and called it an important achievement of the UPA government.
According to The Economic Times report of June 10, he has said Given the actual collection during 2007-08 at Rs 3,14,468 crore, I have asked the Central Board of Direct Taxes to quickly revise upwards the budget (estimates). The estimate will no longer be Rs 3,65,000 crore .
The directions are that the same should be revised to nearly Rs 4,00,000 crore for the current year bringing a growth of nearly 25% over last year. The finance minister feels that this target could be reached because economy will grow by 8.5% this fiscal . The I-T Department has been complimented by the minister for record collections as also low cost of collection, which has come down to 0.54% and according to him, is the lowest in any jurisdictions in the world.
Obviously, credit for this has to go to the persons working in the I-T department who put in hard work to maximize collections generating revenue of Rs100 on a mere expenditure of 54 paise! The government needs to do more to motivate the tax officials to put in their best in future for still better performance. It needs to be appreciated that taxes do not automatically increase with economic growth.
Human factor plays prominent part in ensuring tax compliance. The record collections have been possible because of the toil and vigilance of the IT Department personnel and some incentives could have been announced to reward them to further encourage them for boosting their efforts.
In mid seventies during the congress governments regime, for the excellent work done by the I-T department in the context of Voluntary Disclosure Scheme for Income Tax and Wealth Tax, 1975, which led to extra tax collections of merely Rs 249 crore, the Chairman of the CBDT was awarded Padma Shri and the officials of the I-T Department were given one months extra pay. As a short term measure similar such announcement could have been made by Mr Chidambaram for record collections for 2007-08 .
However, there are broader issues that need to be addressed in the context of the members of tax Services, whose efforts bring crores of rupees in the government kitty by way of direct taxes like I-T & W T and indirect taxes like Customs & Central Excise duties and Service Tax. Yet, the officers involved in such work are not being given even their due status in the hierarchy in the government for no understandable reasons.
Committees, starting from the Wanchoo Committees (1971) headed by a retired chief justice of the Supreme Court have recommended that the chairman CBDT should be given the status of the Secretary to the Government of India. Even the Estimate Committee of Parliament in early nineties made similar recommendation.
This would lead to fast decisions because of elimination of one level in day to day functioning. But the same have been persistently ignored without mentioning any reasons. Both the chairman CBDT and chairman CBEC are getting the pay admissible to the secretary in the GoI.
Hence raising their status to that of secretary (from special secretary presently) involves no financial burden. It would only show recognition of the postion they deserve as heads of prime services in the country and improve efficiency. Not doing so, prima facie, seems unreasonable.
Indian Revenue Service Officers are grossly discriminated in the matter of deputation to other departments of the government.
It may be news to countrymen that such service with a cadre of nearly 5,000 group-A officers has no representation in other departments of the Centre as secretaries, additional secretaries or even joint secretaries on deputation, when with their rich background and multiple discipline experience relating to law, accounts, audit, economics , trade, commerce and business, they should be the obvious choice for deputation to the finance, economics, banking, commerce ministries and even for Embassies and High Commissions abroad as commercial attachees etc.
The FM needs to ponder why such step motherly treatment is metted out to the officers of tax services when they are doing excellent work in boosting substantially the revenues of the Government year after year and when officers of other services much smaller in size are picked up for such deputations!
These are various other areas for which such officers are neglected for example in the matter of allotment of accommodation, foreign training etc. vis-vis other services, but the same are minor aspects compared to the ones mentioned earlier.
The FM needs to ensure that the officers who are revenue earning members in the government and are doing their work exceedingly well with devotion and commitment are treated well and not denied their legitimate rights. In extracting work from tax officers, finance minister simultaneously needs to ensure that their interests too are taken care of well. Mere compliments would not do and one sided approach may prove counter productive in the long run!