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Business News/ Economy / Third party reporting helped in tax revenue buoyancy, says govt official

New Delhi: Reporting of transactions by designated third parties like financial institutions have helped improve the government's tax revenue over the years by encouraging voluntary compliance, according to Raman Chopra, joint secretary in the finance ministry.

Speaking at an industry interaction at Bharat Chamber of Commerce in Kolkata, the official said that the cornerstone of government policy in the last eight to ten years has been non-intrusive and voluntary tax compliance.

A key element of this strategy is third party reporting of transactions which has increased a lot in the last eight years, the official said.

"A lot of information is being gathered, not from the tax payer, but from third parties...That information was lying with us. Originally, you were able to see only form 26AS and the tax deducted at source (TDS) (information). Over the last three years, the entire information available with the government is being shared with you. Once the information is available with you, it promotes voluntary compliance," explained Chopra.

Chopra also explained that the concept of updating tax returns has been an integral part of the voluntary compliance drive.

"The (corporate) rate of tax has been reduced substantially. We came down from 30% in 2014 to 22% and for new manufacturers to 15%. 15% is perhaps the lowest rate in any country. Despite the reduction in tax rate, the improvement in revenue is due to voluntary compliance," said Chopra.

"You may agree with me on this that government has been absolutely successful in improving ease of doing business and at the same time improving revenue collections in a non-intrusive manner," Chopra said.

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Gireesh Chandra Prasad
Gireesh has over 22 years of experience in business journalism covering diverse aspects of the economy, including finance, taxation, energy, aviation, corporate and bankruptcy laws, accounting and auditing.
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Updated: 10 Jun 2023, 01:52 PM IST
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