NEW DELHI : Compliance is one of the key focus areas in the new Direct Tax Code (DTC) report that was submitted to the finance minister last month, Akhilesh Ranjan, the convener of the DTC task force, said on Thursday.

Compliance has several aspects and is not just about lower tax rate, but also about improving litigation management and making the law itself more comprehensible and organized, said Ranjan, who is a member of the Central Board of Direct Taxes (CBDT).

The much-awaited report on DTC, which is yet to be made public, aims to simplify tax law provisions, improve certainty and predictability of the law, besides addressing issues to minimize litigation.

An overhaul of the tax law will make it more advanced, simpler, easy to comprehend and, at the same time, help widen the tax base in a country where tax compliance has historically been low.

“It (the report) will be focused on compliance and that is the cornerstone of any tax policy. Compliance has many facets. Compliance depends on the tax structure, the ease with which taxpayers comply, simplicity with which the law can be understood. All these are factors that go into compliance. And we have tried to address each of these in our report," Ranjan said at an Assocham event.

“All these things... the simplicity, comprehensibility, litigation... These are all aspects that encourage tax compliance and tax revenue comes from voluntary compliance," Ranjan said, adding that there are major recommendations pertaining to using technology to improve compliance, provide better services to taxpayers, and in turn to receive better information from them.

“There are chapters on litigation management. We have also tried to simplify the language (that will help in better interpretation of the law)," he said.


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