A day after his ministry dropped contentious proposals in the discussion paper on the Direct Taxes Code, Finance Minister Pranab Mukherjee today said the proposed law would ensure a simpler and more rational direct tax regime.
He asked senior income-tax officials here to organise training for staff at all levels to meet the challenges of switching over to the proposed new taxation regime, which will replace the Income Tax Act of 1961.
“A major tax reform initiative has already been announced in the proposed ‘Direct Taxes Code 2009’ to simplify, rationalise and consolidate the laws and procedure, relating to direct taxes,” Mukherjee said after laying the foundation stone of the new office building of the Income Tax Department here.
He said in order to improve compliance further, tax laws had to be simple, stable and robust; tax rates should remain moderate; and multiplicity of tax exemptions and deductions should be gradually phased out, in order to widen and deepen the tax base.
The Code, however, does not give any details on the income-tax structure, such as the slabs or rates, leaving the issue to be tackled in the Direct Taxes Code Bill, to be tabled in the next session of Parliament.
Mukherjee said that tax administration needed to be further toned up by appropriate use of technology on the one hand and improving professional competence and responsiveness of the employees on the other.
“I have directed the Human Resource Directorate of the Department to draw up plans for training in cooperation with tax training institutes for capacity building for smooth transition to the new legislative regime. I have recently announced that Advanced Mid-Career Training Programme for IRS officers would be started during the current year,” he said.