Cadre review and restructure : Latest media report

As per the latest news available with us that the cadre review file is being examined by Group of Ministers led by Sri. A.K. Antony and likely to be submitted to the cabinet by second week of April 2013 for final approval.
Following is the latest media report :
I-T hiring 19,000 more tax officials

As per a proposal before a group of ministers (GoM) led by defence minister AK Antony on cadre restructuring of the income tax department, about 800 senior level officers in Group A and more than 18,000 Group B and Group C employees will be hired once the ministerial panel and the Cabinet clears the proposal.

The income tax department, which has just sent reminders to over 1 lakh assessees who failed to file tax returns, is embarking on a massive recruitment drive, hiring 19,000 more officers at various levels with a view to increasing the efficiency of the tax administration. As for taxpayers, this could mean faster and better delivery of services — quicker refunds, for instance — but could also result in a section of them, especially large corporates and high net worth individuals who escape or underpay taxes, getting hefty demand notices in the months to come.

The government is keen to “reclaim the peak” tax-to-GDP ratio of 12% reached in 2007-08 and recognises that revenue enhancement is the ideal way of bridging revenue deficit rather than slashing productive government expenditure.

Fresh recruitment along with freeing some existing officers from routine administrative work thanks to adoption of technology would enable the department to focus more on searches, surveys and scrutiny of returns, the steps before issuing assessment orders to defaulters. The addition to manpower would also help analyse the repository of data on high-value purchases to identify tax evaders. Once implemented, the department will be able to double the level of scrutiny from 1% now to 2%.

The GoM had met on February 19 to consider cadre restructuring of IRS officers and the optimum level of annual hiring in the three categories.

The government is also looking at extending the rank and pay of special secretaries to chief commissioners of large income tax zones and to chiefs of various directorates under the Central Board of Direct Taxes.

The department has started the practice of combing through data on large savings bank deposits, credit card payments, investments in equity mutual funds and debt instruments to identify persons and corporate entities that have either not filed or have filed misleading returns. To step up this tax collection drive, the department needs to address its acute manpower crunch. According to official figures, it has a staff shortfall of 30% compared to a sanctioned strength of 57,793 employees.

“The investigation directorates, intelligence and criminal investigation directorate and central charges of the income tax department are facing acute workforce shortage which is hampering their effective functioning,” former minister of state for finance SS Palanimanickam said last December.

In the revised estimates of Budget 2013-14, the government has raised the personal income tax target and lowered its corporate tax collection target, with the result of net direct tax target moving up by Rs 1,876 crore. Up to March 20, the department collected corporate tax of Rs 3.3 lakh crore, or 92.2% of the revised estimate. It also collected Rs 1.8 lakh crore of personal income tax by March 20, meeting 87% of the sharply higher revised estimate.

Experts remain sceptical about the possibility of having met the target in the 2012-13 fiscal as it is a challenge to collect about 8-9% of the estimated amount in a week. The government has kept an 18% growth target for direct taxes in 2013-14 assuming the country’s gross domestic product would cross $2 billion.

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