By BS Reporter
Finance Minister P Chidambaram on Wednesday said the government would provide a stable tax regime that was in the interest of taxpayers and tax collectors.
Speaking at the fifth meeting of consultative committee attached to his ministry, he said the government was fully committed to provide best possible facilities to taxpayers for better tax compliance and revenue augmentation.
The finance minister stressed the need for systematic changes, including strengthening of the tax information system, for better collection. He said 35 million people are filing income-tax returns and only 1.5 million have declared income of Rs 10 lakh and above for tax purposes, which is not realistic.
India has moderate rate of income tax as compared with various developed countries, the minister said, as the peak rate of taxation is 30 per cent. Therefore, there is lot of scope for better tax compliance and tax collections, he added.
About 50 per cent of taxpayers are filing returns through the electronic mode, said Chidambaram, but there is a need for more taxpayers to electronically file returns as this will help in expediting tax processing and refund process.
Members of the consultative committee suggested various measures to improve the relationship with taxpayers. Some suggested efforts be made to keep the tax interest on refund be paid at least at the bank rate of interest, while others proposed widening of tax base for higher revenue collections.
Members also suggested tax facilitation centres be opened in rural areas, which would help in increased revenue generation. Tax awareness campaign for payment of due taxes on time could also be undertaken in the local language, they suggested.