‘Greedy’ Pranab Mukherjee hopes to mop up more

“Greedy” for higher revenues, finance minister Pranab Mukherjee said he hopes India’s direct tax collection will top the Budget estimate of Rs 4.3 lakh crore during the current financial year ending March.

“I had last year increased the direct tax target in the middle of the financial year. I do not plan to do any such thing right now. However, my appetite for taxes is infinite and I am greedy. I expect that the tax department will do its best and give a little more than Rs 4.3 lakh crore,” Mukherjee said addressing the 26th Annual Conference of Chief Commissioners and Directors General of Income Tax in New Delhi on Wednesday.

Direct tax collection stood at 3.79 lakh crore during the last fiscal.
At the same event, Central Board of Direct Taxes chairman S S N Moorthy said his department was confident of meeting the direct tax aim of Rs4.3 lakh crore in the current fiscal.

On the upcoming Direct Tax Code, Mukherjee said, rollout of the new regime will curtail problems associated with current tax procedures. “The (Direct Tax Code) draft is under revision... and the discussion paper will be shortly in public domain before introduction in Parliament in the forthcoming monsoon session. I anticipate the new tax code to usher in changes in tax practices,” the finance minister said.

The government has missed its earlier deadline of April 1 for implementation of the new tax code.

Asked when the new regime would be rolled out, the tax board chief was tight-lipped, saying it will “soon” be introduced.

The finance minister stressed the need to simplify tax procedures.

“Tax procedures need to be simple, robust and moderate and multiplicity of tax exemptions and deductions should be gradually phased out in order to widen and deepen the tax base.”

Among the new initiatives that the tax department may undertake, Mukherjee said the process of setting-up more centralised tax processing centres was the need of the day.

He underscored the challenges of tax avoidance from overseas and said eight new tax vigilance centres will be set-up abroad to check evasion. “Use of tax havens is another challenge, which emanates due to globalisation. In order to facilitate exchange of information, two income tax overseas units within the Indian Mission have been created in Singapore and Mauritius.”

The government plans to set up eight more such units in the US, UK, Netherlands, Japan, Cyprus, Germany, France and UAE, Mukherjee said.

Speaking on the state of the overall economy, the minister reiterated India’s gross domestic product is likely to grow 8.5% in the current financial year ending March.