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Finance Minister, Shri P. Chidambaram has said that the movement in the pattern of tax revenues is in the desired direction. He was addressing the 21st Annual Conference of Chief Commissioners and Directors General of Income Tax, here today.
Inaugurating the two-day Conference, the Finance Minister laid out a broad vision of the Income Tax Department. He pointed out that in a notable achievement, in 2004-05, direct tax-GDP ratio crossed 4 per cent and it is expected to cross 5 percent in 2005-06. For the first time, direct tax revenue in 2005-06 is slated to exceed the revenue from indirect taxes, the Finance Minister said. In the developed countries direct taxes are far more significant contributor to total revenues, he said.
Finance Minister expected the Income Tax Department to gear itself up to face the emerging challenges. He pointed out that methods of tax evasion are becoming ever more complex and sophisticated, which the tax officials must equip themselves to tackle. The investigative methods being adopted must graduate from the “blunt” instruments of search and seizure to the “sharper”, intelligent methods using information technology.
The Finance Minister emphasized the need to train Income Tax officials in the international tax laws. He said that in the wake of increasing Double Taxation Avoidance Agreements with other countries, IT officials are required to have good understanding of tax laws of other countries.
Finance Minister expected the supervisory officers of the department to lift themselves above routine matters and devote more time and energy to developing new ideas. The minister emphasized the need to strengthen vigilance in the department and ensure that the highest standards of integrity are attained.
Amongst the new initiatives, Finance Minister stressed on the Help Centres for Small Taxpayers and the Large Taxpayers Units. He emphasized the importance of making these a success.
BSC/BY/GN-251/05
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