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Kelkar report to be submitted to finance ministry soon

Dr Vijay Kelkar, head of task force of the direct and indirect taxes, on Tuesday said he would submit a revised draft proposal of his committee recommendations to Finance Minister Jaswant Singh in the first week of December for further considerations.

Addressing a symposium on change in taxes organised by Prabodhan Prakashan, a charitable organisation that publishes Shiv Sena mouthpiece Saamna daily in Mumbai, Dr Kelkar said, he along with the members of the task force had visited Pune, Ludhiana, Ahmedabad, Chennai and Bangalore in the recent weeks and gathered various constructive suggestions from taxation experts and public at large on the suggestions in the consultation papers of the task force which was submitted to the finance ministry about a month ago.

Dr Kelkar, who is also the advisor to the finance minister, observed that there was widespread criticism about the task force recommendations by the people who did not read the report in detail.

''However, most of the professionals like noted chartered accountants and taxation experts had appreciated the efforts made by the task force for the long-term benefits not only of the economy but also for both, the honest tax payers and non-tax payers,'' he said.

The revised draft of the Kelkar Committee would be again put on the site for further comments from public and would finally be accepted by the ministry for incorporation in the Union Budget proposals in February.

''Why should the government provide tax incentives or subsidy to the tax payers in terms of housing loans while it has withdrawn or reduced subsidy in gasoline or kerosene for mass consumption mainly to the poor people who are basically not in the tax bracket?'' he quipped, while discussing the suggestions of withdrawing tax rebate on housing loans.

Dr Kelkar, who gave a patient hearing to a panel of speakers, comprising noted economist Dr P R Joshi and chartered accountants Rajendra Chitale and Anil Sathe, said the objective of the task force on direct and indirect taxes was to get rid of ''exemptions raj only for the privileged people'' and put a simplified and transparent tax payment system that would reduce not only the tax burden on citizens but also curtail the transaction cost in the economy.

Once an IT-based tax payment system is established with simplication of various norms, a tax payer would need to fill up only a one-page form for his tax payment.

''We are designing the system looking at the next 20 years period when a sizeable portion from the young generation would be paying taxes to the government,'' he observed.

Advocating for extension of tax net to the agriculture sector, Dr Kelkar observed that this sector had increasingly become a tax avoidance shelter for a growing number of non-agriculturists. ''We know a number of non-agriculturists using agro activities as a tax shelter and this needs to be improved for augmenting higher resources of the state governments.''

He said that the proposed suggestions for agriculture taxes would be enforced by the Centre only through the empowerment of the state governments. This additional sector of tax collection would certainly improve the financial condition of several state governments, particularly in areas of their investment such as health, infrastructure, education and pension payment.

''The overall objective of the task force recommendations was to make each member of the society pay his dues as a responsible citizen of the nation,'' he added.

Over the past several years, the taxation process in the country became malfunctional and honest individuals had to bear higher tax burden while corporates and influential public get away with various concessions and incentives under various schemes. It was the idea of the finance minister to bring about drastic changes in the law and bring the task force report for a wider public debate by putting the recommendations on the finance ministry internet site seeking suggestions from various sections of the society.

UNI

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