What is the purpose of the transparent tax system?

What is the purpose of the transparent tax system?

The old and complicated procedure of taxation is targeted to be replaced by easier and simple rules, and for the practical implementation of the transparent tax system, the Vivad se Viswas scheme is already implemented.

What is a transparent taxation platform?

Through a video conference during the lockdown in 2020, Prime Minister Narendra Modi launched the "transparent taxation platform" for honouring the honest, requesting the citizens who owe taxes to come forward to pay their tax dues.

It is considered to be the faceless assessment to the next phase of direct tax reform targeting to ease the compliance for the taxpayer for rebuilding the economy hit by the pandemic. As this is a faceless assessment, it does not require the taxpayer to meet any officer or visit an office, rather the implementation of the taxpayers' from 25th September 2020 came into force.

Though it is a faceless tax system, but the Prime Minister assured it to be fair and transparent.

The centralised computer system will pick up tax returns on the on risk parameters and mismatches. After that, a team of officers will be allotted randomly to any city, and another random team of the officer will do the scrutiny.

In case the notices are to be sent, they will be sent by a centralised computer system, and the taxpayer can send a reply electronically. The taxpayer doesn't require to visit a tax office or meeting an officer.

This is beneficial for controlling the situation where the matters are settled through known officers and personal connections.

The taxpayers' charter makes sure the tax treatment is fair, honest, courteous and reasonable. On the other side, the taxpayer has to be honest and comply with time and conditions.

It can be noted that the number of taxpayers has increased to 2.5 crores from 1.5 crores as per the last record. However, the number of taxpayers is not appropriate compared to the number of the population earn a tax payable income.

Therefore, the Prime Minister requested the taxpayers to come up voluntarily and pay the due the contribute to the development of the economy of the nation. This will be helpful for the economic reforms including policy, as a continuous process.

The Prime Minister suggested the tax system requires fundamental and structural reform because the colonial system is still being followed. The compliance gets difficult to the complex procedure, and therefore the laws should be more consolidated.

What is "Vivaad se Viswas" scheme?

The scheme named "Vivaad se Viswas" was brought resulting in around 3 lakh cases getting solved outside the Court.

The listing taxation reforms are undertaken by the Government since 2014. The amalgamation of several taxes at various stages, the Goods and Services Tax is introduced, dispute resolution scheme of threshold fixed for pursuing tax matters in different courts, has reduced litigation.

There is a reduction in the tax rate, as no tax is levied on income up to 5 lakhs.

The seamless taxation administration does not involve complicated rules, rather follow simple rules and technology.

Prime Minister Modi claimed that his team in the last six years targeted to focus on extending banking service to the areas where the banking services were not reached.

The main features of the transparent tax platform for making it people-centric and public friendly are:

• Faceless assessment

• Faceless appeal

• Taxpayers' charter.