Tax policy and tax administration are like Siamese twins. Unfortunately, while tax policy is much discussed, the other twin has received insufficient attention. Sunil Khilnani, in a recent article, lamented that in India, while policy intentions are discussed in detail, the debate deficit about 'last-mile implementation issues' to give effect to policy intent continues.

This means, he says, more discussion on education policy but not enough on what happens in the classroom, discussion on police reforms, not enough on what happens in the police station. This neglect has permeated into taxation as well (the emphasis here is on indirect taxation).

While policymakers deliberate on the implementation of GST, there are major deficiencies in tax administration that warrant attention. Two in particular merit mentioning: performance measurement and taxpayer services. Both impact what happens in the field office.

In the first, we have tax officers being evaluated on the basis of realisation of total revenue targets. This approach has encouraged a peculiar virus called 'Targetitis' that strikes taxmen in December every year and lasts until March. The revenue-at-all-cost approach has vitiated relations between the tax department and the taxpayer.

A better option would be to evaluate officers on the basis of their contribution to the revenue augmentation effort by enforcement of better compliance verification measures through return scrutiny, audit, anti-evasion and arrears recovery, carried out throughout the year. This would reflect the individual efforts put in by senior officers instead of relying on a target-based approach where, in any case, the predominant influencing factor is the pace of economic growth.

Performance measurement also has qualitative dimensions. This is often neglected. The performance of officers depends on their level of skill, which requires constant upgradation. These areas are particularly important: knowledge of the law, computer-related skills and skills in the scrutiny of financial records. Today, in the department, this is being imparted at selected training centres.