SPEECH OF THE HON'BLE PRESIDENT OF INDIA, SMT. PRATIBHA DEVISINGH PATIL ON THE OCCASION OF THE CONCLUDING CEREMONY OF THE YEARLONG CELEBRATIONS COMMEMORATING 150 YEARS OF INCOME TAX IN INDIA
Vigyan Bhawan, New Delhi, 15th July 2011
Ladies and Gentlemen,
I am delighted to be in your midst at the Concluding Ceremony of the celebrations marking 150 years of Income Tax in India. To commemorate this event, I am informed that a Citizen's Charter was released, a coin was issued and year long celebrations were held in each of the Chief Commissionerates, as a part of the efforts to boost the morale of the cadre and improve public interface. On this very momentous occasion, I convey my very best wishes to the Income Tax Department and to all connected with its achievements.
Taxation, in one form or another, as a source of revenue, is an ancient concept. Kautilya in the "Arthashastra" mentions the management of treasury, including tax collection, as one of the essential elements of a State. That the purpose of taxation was meeting expenditure for fulfilling the various functions of the State and for public welfare is also an equally old view. Both these ideas continue to be relevant fundamentals for tax structures and systems of Nation States of the 21st Century.
It was in 1860, that for the first time in India's legislative history, a Bill imposing income tax, in its contemporary form, was passed. Since then, income tax stands transformed not only into a measure for mobilizing resources for national development, but also, through its exemptions and deductions, has emerged as a tool for directing investment to priority sectors of the country. The personnel of the Income Tax Department will however, have the continuous challenge of adopting modern management skills and innovative use of technology, to ensure equity and efficiency. This should also help in bringing maximum transparency in the implementation of tax policies and in the collection of taxes.
Tax payer services have improved with the introduction of e-filing of returns, e-payment of taxes, refund banker scheme, speedy and centralized processing of returns. Due to rationalization of the tax structure and improvement in tax administration, direct taxes now contribute about half of the Central Government's revenues. A major initiative to reform and simplify tax laws has been launched, with the introduction of the Direct Tax Code now under consideration of Parliament.
We can be proud of our successes, but there are many significant tasks that are yet to be accomplished. In particular, there is need for generation of additional resources to fulfil our pledge to bring about a more equitable society, in which the marginalized sections also become a part of the growth story of our nation. It is for this reason I feel, that this Closing Ceremony of the celebration of 150 years should be an occasion to introspect about how we have fared so far, and what are the tasks ahead. In this regard, there are some broad policy issues on taxation on which I would like to speak.
Firstly, an environment of voluntary tax compliance has to be fostered and nurtured in the country. This could best be done perhaps, by inculcating voluntary tax compliance as a core duty. Generating discussions in public platforms and in the media, conveying the message through performing and fine arts should all be considered for achieving this goal. In this context, I am glad that workshops were held by the Income Tax Department across the country in which artists, citizens and especially children, were invited to execute works that depict their perception of the role of the Department in nation building. It would, indeed, be well to ingrain in the minds of children, at an early age, the importance of meeting tax obligations, so as to create tax responsible citizens.
Second, while undoubtedly the fostering of an environment of voluntary compliance will help, there is also need for putting in place measures, through laws and procedures, to ensure that recalcitrant tax evaders are brought to book. The war against black money has to be addressed both domestically and through cross-border measures. The thrust for better global co-operation has to be continued, through appropriate agreements on tax information exchange, and on mutual co-operation between countries to track down evaders taking shelter in other jurisdictions.
Thirdly, the interface with compliant taxpayers, especially small taxpayers, senior citizens and pensioners must be initiated and maintained on a continuous basis, for a feedback on difficulties being faced by them. Rectifications in systems and processes, if required, can then be carried out in real time. At the same time, the use of electronic modes for filing of returns should be further popularized in the interest of greater efficiency. The improvement of basic infrastructure in offices, especially where taxpayer services are rendered, should be looked into, in order that a visit to the tax office is a pleasant experience.
Fourthly, for any dynamic institution, innovation is the keyword. Such innovation is likely only through introspection, experience-sharing, discussion and debate. There should be periodic interaction between officers, holding of seminars and workshops for brainstorming, as well as study of international best practices and experience sharing with foreign tax administrations, to keep abreast of the global economic environment. Dialogue with major think tanks, economic institutions and experts for fostering of innovative and new solutions to the problems which confront tax administration, could be intellectually stimulating, and can also generate some new ideas. The Advanced Mid-Career Training Programme for Indian Revenue Service Officers recently started in collaboration with top institutions in India and abroad, would be useful for enhancing their capabilities. It goes without saying that constant upgradation of technical skills is the driver for efficiency in any administration.
I am sure that with initiative and dynamism, steps in the direction I have mentioned above, will soon come about and there will be further improvement in some of the core areas of the functioning of income tax authorities. With continuing innovative efforts and with the widening of the rather small taxpayer base of about 3.5 crore taxpayers, the direct tax-to-GDP ratio should rise beyond the present figure of 6.1 percent. Therefore, while congratulating the Income Tax Department on its performance till date, I exhort its personnel to rededicate themselves with fresh energy and fresh ideas, to the task of building a prosperous and modern India. You can take inspiration from a beautiful verse of the 'Raghuvansha', written by the classic poet Kalidasa, where he says of King Dileepa, "It was only for the good of his subjects that he collected taxes from them, just as the Sun draws moisture from the Earth to give it back a thousand fold." I would like you to keep in mind these lines while formulating tax policies.
With these words, I once again convey my greetings to all connected with various aspects of Income Tax - from the formulation of policies to their implementation, tax collection, dispute settlement and the tax payers themselves.
SPEECH of HON’BLE FINANCE MINISTER
On the occasion of closing ceremony-completing 150 years of Income Tax Department in India
Date: 15th July,2011
Venue: The Plenary Hall , Vigyan Bhavan
Your Excellency, Mahamahim Shrimati Pratibha Devisingh Patil,
President of India
Shri S.S. Palanimanickam, Union Minister of State, Revenue
Shri Namo Narain Meena, Union Minister of State, Banking & Insurance
Shri R.S. Gujral, Secretary Revenue,
Shri Prakash Chandra Chairman, CBDT, Officials from the Ministry of Finance,
Ladies and Gentlemen,
Your Excellency, I am grateful to you for being with us on this momentous occasion, when the Income Tax Department celebrates its 150th year in the service of the nation.
2. From its humble beginnings in 1860, when Mr. James Wilson introduced it in the then British India, the Income Tax Department has matured into an organisation that has consistently mobilised the resources needed for financing the development of the country. This is more so in the recent years, when the direct tax collections have increased and have reached nearly Rupees four lakhs forty six thousand crores in 2010-11. Indeed direct tax collections now account for more than 56 per cent of the total revenue collections of Central Government, making our tax system more progressive than it ever was in the history of independent India.
3. There has been considerable improvement in the efforts of the Department to provide better services to the taxpayer. Government’s thrust has been on upgrading and induction of new technology in the services rendered by the department. The Department has focused on e-governance initiatives to meet the challenges of the rapidly changing economic environment and the expectations of the growing numbers of taxpayers.
Ladies and Gentlemen,
4. Our ancient history and culture give us in India our unique identity. Ancient lawgivers and philosophers, like Manu and Chanakya, wrote extensively on the duties of a sovereign and their relationship with the subjects. They laid foundations of mighty empires and enabled the spread of India’s unique culture and civilization across many countries. When Mr. James Wilson introduced Income Tax in India in its modern form, he was only following in the footsteps of this illustrious tradition. The ancient dictum, ‘Kosh Mul Danda’ continues to be as relevant today as it was thousands of years back.
5. During the course of the yearlong celebrations by the department, one of our officers was able to locate Mr. James Wilson’s grave in Kolkata.
6. I must add that contrary to general understanding, the worlds of finance and culture are not as divorced as they are sometimes made out. The portrait of Surendranath Tagore, nephew of Gurudev Rabindranath Tagore, as a Tax collector, painted by Gagendranath Tagore, another nephew of Gurudev, which has been reproduced in the book released today, is a case in point. It was in this spirit that an Art Workshop was organized in July 2010 in Kolkata. The enthusiastic response of the people and the artist community of Bengal encouraged the officers of the department to hold workshops and exhibitions in 18 other cities across India. The response everywhere was similar. The wealth of art, ranging from tribal and folk, classical to modern cubism that emerged in these workshops reinforces the classic dictum that there is unity in India’s diversity. It showed that our society is live and our culture is rich. More importantly it reflected that our people are not wary of the Government when it takes such initiatives. I compliment the Income Tax Department, and the organisers of these art workshop, on this unique initiative of bringing the department closer to the people of our country and hope that this approach finds other suitable expressions in the years to come.
7. At one level, tax collection is a painful and a difficult task, as it requires people to part with their hard-earned incomes. This task could become more acceptable and participatory if the tax payer knows that his contributions are being constructively used in the task of nation building. Through the film and the artworks, we have tried to remind people that their tax contributions go a long way in bringing a smile on the faces of many people, who otherwise would languish in poverty. At the same time, it helps in creating the opportunities for them to grow and improve their well-being.
8. Let me conclude by congratulating the Department of Revenue on the completion of 150 years of Income Tax in India and wish it a very bright future.