NEW DELHI: In a rare move, the government on Sunday swapped the portfolios of revenue secretary and expenditure secretary Sumit Bose signaling a shift in the tax department's priorities from a focus on enforcement, an image it had acquired over the last three years, to one which is taxpayer-friendly.
Gujral, a surprise choice for an assignment in North Block during Pranab Mukherjee's term, will, however, continue as the finance secretary, whose primary role is to coordinate budget preparation, in addition to handling the expenditure portfolio.
This is so far the most significant change since P Chidambaram returned to the finance ministry on Wednesday and comes on the back of a series of reviews initiated since Mukherjee resigned on June 26 to contest the presidential elections.
Since Mukherjee's departure, Prime Minister Manmohan Singh, who was in-charge of the finance ministry for a little over four weeks, had got the revenue department to suspend its plan to issue a fresh demand notice on Vodafone in addition to getting stakeholder feedback on the controversial general anti-avoidance rules (GAAR).
Review of taxation policies for development centres of IT companies and for FIIs is also underway and the PM has admitted to tax issues being an area of concern.
Gujral was associated with almost all these decisions and was widely tipped to be moved out of the finance ministry but has managed to stay in North Block.
The Haryana-cadre officer is often criticized for failing in his role of reining in revenue service officers, who have traditionally resorted to putting in place a regime which unnecessarily burdens the taxpayer. In several cases, the department did not undertake basic stakeholder consultation.
The shift is significant since the government usually refrains from changing the portfolio of the finance secretary, the senior-most officer in the ministry. In the past, a reallocation of the revenue secretary's portfolio has usually been linked to the officer's elevation as finance secretary.
In the first three days of assuming charge of finance, Chidambaram has held extensive meetings with top officials of the two revenue boards - the Central Board of Direct Taxes and the Central Board of Excise and Customs.
Apart from pushing controversial amendments and unleashing a coercive regime, both the revenue wings have also been way below the tax collection targets so far this year. The two wings were seen to be making feeble attempts to show that collections were positive.
Even on other fronts, Gujral is being blamed for not being vigilant in ensuring that over zealous commitments such as capping subsidies at 2% of GDP, which does not reflect the economic and political reality, did not slip into the budget.
Collection of direct and indirect taxes has ranged between 6% and 12% against the asking rate of 20-25% to achieve the budget target of over Rs 10 lakh crore. Gujral is also linked to controversial decisions such as holding back tax refunds and leaving crucial posts such as DGs of Income Tax investigation in Mumbai and Chennai vacant.
Edited By Cen Fox Post Team
