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Axe that tax

Say income tax and you’ll see people shudder. That’s thanks to the incredibly complex and cumbersome tax system that exists in the country.

     Print Edition: November 1, 2007

Say income tax and you’ll see people shudder. That’s thanks to the incredibly complex and cumbersome tax system that exists in the country. Despite sporadic attempts to simplify the system, taxation remains a complicated system, and this alone generally puts most people off paying taxes at all.

Once people manage to get past that initial reluctance to enter the tax labyrinth, they realise first-hand that the system is deeply flawed. That it treats the honest taxpayer on par with the tax evader.

And that it is definitely not friendly to those who obediently pay their taxes, year after year. That the default behaviour of any tax oficial is rude. That delays are endemic to the system.

The current regulations give wide-ranging powers to the tax authorities, particularly at the assessment stage. The entire process is driven by doubt and suspicion rather than by trust.

In fact, an income tax official says that the benefit of doubt is invariably with the revenue department and interpretation of law is entirely the prerogative of an officer.

FIVE MOST COMMON PROBLEMS AT THE TAX DEPARTMENT
Delay in refunds
Non-adherence to working hours
Rude behaviour of tax officials
Non-acknowledgement of letters and complaints
Lack of transparency

That’s because the structure of the law makes any intervention by a superior officer or an administrative body impossible. Assessees can face numerous problems within the system—acts of omission on the part of the scrutiny officer, misplaced files, delay in transfer of files, harassment during a search, discourteous behaviour of officials at the time of hearings and so on.

Unfortunately, the tax department’s occasional efforts at grievance redressal seem lost in the mass of red tape and the haze of corruption that pervades any income-tax office, deserved or not.

It is against this background that the income tax department is now trying to set in place an effective redressal mechanism. Officials are already fighting charges of corruption. This is largely because taxpayers are able to access information easily thanks to the RTI Act.

The department has now resurrected the office of the tax ombudsman, and has introduced blogs on its website. Today, the ombudsman’s cell has been set up in 12 cities to settle disputes and override officers as and when required. Will this step help in boosting the image of the tax department as corrupt and assessee-unfriendly? This is something only time can answer.

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