The standing committee on finance has asked for the setting up of an expert group, comprising of tax experts and economists, under the department of revenue to suggest reforms in the tax regime.
The committee, in its 40th report on the demand for grants for the revenue department, has said the disposal of cases under the erstwhile Foreign Exchange Regulation Act (Fera) was very slow, with 5,443 pending cases, involving penalties of Rs 1,693 crore, locked up.
It has also expressed concern over the one-and-a-half-year old Foreign Exchange Management Act (Fema) having 4,327 cases piled up under it by December 2002. On improving the tax-GDP ratio, the report has quoted the finance ministry in saying that the most important reason for the poor ratio was the exemption on agricultural income tax.
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The committee has also said the government should try to bring a larger number of prospective tax payers into the tax net.
The committee has come down on the plethora of tax exemptions under both direct and indirect tax, saying a lot of steps were pending in the current fiscal to weed them out.
It has also asked for the swift computerisation of the department to reduce its interaction with tax payers.