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New software to crack down on tax evaders: FM
November, 13th 2006

The Union finance ministry intends to use software and technology to crack down on tax evaders. Speaking at the inauguration of the large taxpayers unit(LTU) here, Union FM P Chidambaram said that the ministry had engaged software professionals to help develop innovative search engines which would mine information and help unearthing tax evaders.

Mr Chidambaram said that there was a need to bring about attitudinal change besides introducing modern management principles in tax administration. He said that any further issues relating to tax reforms hinged on compliance.

As regards cost of tax collection, Mr Chidambaram noted India's percentage of cost to taxes collected was a measly 0.67% and expected to touch 0.64% this year.

On LTUs, he said that there were plans to launch similar units in Chennai, Mumbai, Kolkata and New Delhi and these would become operational before March 2007. Mumbai has the largest number of entities who would be able to join the LTU(282) while New Delhi has 202 entities. Chennai has 132 while Kolkata has 131 such entities. The silicon capital of India-Bangalore has 83 entities.

31 out of Bangalore's 83 eligible large taxpayers have joined here. The total tax revenue paid them in 2005-06 was Rs 1,464 crore which is projected to touch Rs 1,800 crore this fiscal.

A LTU serves as a single-window for all major tax payments made by an en-tity. To be eligible to come under the LTU either an entity must have made ex-cise duty/service tax payment to the tune of Rs five crore or must have made income tax payment of Rs 10 crore and more.

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