Right in the midst of budget preparations, Atulesh Jindal took over as the chairman of the Central Board of Direct Taxes or CBDT last week after his predecessor A.K. Jain retired on 31 January.

Jindal became the 11th chairperson to be appointed to helm the tax department in just over five years, highlighting the urgent need to bring in reforms in tax administration as recommended by various committees to ensure that there is continuity in leadership to shape India’s tax policies and make the tax administration more taxpayer-friendly.

Contrary to recommendations made by the administrative reforms commission and the tax administration reforms commission, chairpersons at the direct and indirect tax wings of the government continue to be appointed at the helm of the tax department, irrespective of their residual service.

As a result, the turnover rate of the chairperson’s position in both the tax arms of the Union government has been very high, with a few incumbents holding the position for only a couple of months before retiring.

For instance, the appointments committee of the cabinet was silent on Jindal’s tenure. It is likely to be only till July when he superannuates. His predecessor Jain’s tenure was even shorter at two months. Only Jain’s predecessor Anita Kapur had a tenure of 13 months.

Many commissions in the past have recommended providing chairpersons of these boards a fixed tenure. The second administrative reforms commission under Veerappa Moily had recommended a fixed tenure for all top level posts in the government.

The tax administration reforms commission headed by Parthasarathi Shome had also criticized the selection and appointment process at the boards.

“The selection of Chairs does not take into account the length of their remaining tenures prior to retirement. The selection is based almost entirely on seniority. As an indicator, in 2014 alone, there are likely to be four Chairs of CBDT and three Chairs of CBEC (Central Board of Excise and Customs). For Members, there is a requirement of one year of residual service. Otherwise, the selection process is the same,” the report submitted in 2014 highlighted. “With such rapid turnover and short tenures, there is little leadership in the Boards and, consequently, scant attention and time being devoted to directing national tax policies or providing administrative guidance—their quantity as well as quality have been reduced to random outcomes of ephemeral Chairs and Members,” the report had said.

Last week, the National Democratic Alliance government moved to implement one of the key recommendations of TARC (Tax Administration Reform Commission) and announced the setting up of a tax policy unit for coherence in tax administration and policy. Analysts are hopeful that some of the more contentious recommendations like the fixed tenures and merit over seniority are also implemented.

“One can imagine what kind of taxation policy and vision is currently being implemented in the tax department. With such frequent changes, where is the time for a chairperson to implement his or her vision and carry out much-needed changes in the tax department’s attitude and structure to make them more taxpayer-friendly,” said a tax partner at a law firm, who did not want to be identified.
(Source - LiveMinit)