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CBDT carrot to boost collections

Smita Tripathi

The Central Board of Direct Taxes has promised to boost tax collections by almost 20 per cent or Rs 100 billion over the next three years if given the green signal for a dramatic departmental restructuring programme.

Large numbers of middle-level officers will be promoted to higher grades under the proposal, which is likely to be implemented by 2002 or 2003. Simultaneously, more than 2,500 posts in the department will be abolished.

The quid pro quo deal will be part of a memorandum of understanding between the CBDT and the Union government. It will break new ground as the first ever memorandum of understanding between the government and one of its own departments.

Income tax collections are likely to touch around Rs 350 billion as per the revised estimates in the fiscal 2000-2001 and they've been growing by over 15 per cent each year. The CBDT has said it will hike collections by Rs 100 billion above the natural increments that take place each year over the next three years.

The large-scale promotions will start at the income tax officer level so that each officer will be processing fewer cases. Similarly, senior-level commissioners will be in charge of about 20 direct subordinates compared to about 70 people at present. Inevitably, this will mean a huge increase in the number of officers at all levels.

For instance, a city like Delhi could have several chief commissioners instead of one at present. The CBDT's proposals come at a time when other government departments are being ordered to downsize.

Today each income tax officer handles nearly 25,000 files and this will be brought down to around 5,000 to 7,000 files under the CBDT's proposals.

The department is also seeking greater control over its own computerisation programme, which will play a key role in increasing tax collections. A large number of clerical staff will be promoted to officer-level once the computerisation programme becomes effective.

The initial proposals for restructuring the income tax department were presented to the Union Cabinet in August 2000. However the Cabinet suggested that the restructuring should be based on a MoU between the finance ministry and CBDT and the department should promise to raise revenue collection in return.

The tax department is likely to make a slew of moves including widening the tax base and strengthening collection machinery in order to boost revenue collections dramatically in the next three years. Income tax department officials believe the Rs 100 billion target is within reach and not overly ambitious.

Says N Mishra, convenor, implementations cell for restructuring, department of income tax, "No retrenchment will take place but the additional workload will be handled by the existing staff."

In future, however each tax department employee will be expected to handle 1,350 taxpayers compared to only 265 today. "We intend to increase the handling capacity per employee of tax payers from 265 to 1,350 over the next 10 years. If the number of tax payers per employee increases beyond 1,350 then more people will be hired."

The income tax department has faced difficulties in recent years because of slow promotions and stagnation in the cadre. A 45-year-old officer is likely to be only a director in the Central Government compared to IAS officers who can become joint secretaries by 40.

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