India Takes First Step to Tax Reform

August 14, 2013 Taxation in India

make_money)online1NEW DELHI – The government of India is going to improve the national tax system and implement international standards for tax management, by removing legislative ambiguity, and by establishing a friendlier tax administration.

In a statement issued on August 13th the Ministry of Finance of India confirmed that the national government is setting up a new commission to examine the country’s tax system and to recommend potential changes to improve tax administration and the implementation of tax policies.

The new body, to be called the Tax Administration Reform Commission (TARC), is set to operate for a period of only 18 months, and will be made up of 5 experts, who are yet to be named, with significant experience in tax administration and policy making.

The Commission will be charged with assessing the tax system of India in comparison with developed countries, and will be required to recommend legislative changes and tax updates in line with the findings.

TARC will also be required to “…help in removing ambiguity in application of tax policy and tax laws, thereby establishing a stable tax regime and a non-adversarial tax administration… the Commission will facilitate an efficient tax administrative system that would enhance the tax base as well as tax payer base.”

The Commission was first proposed in February by  Finance Minister P Chidambaram, who, at the time, said that India, as an emerging economy, should strive to maintain a tax system which conforms to global practices.

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