International

Online taxation will lead to Transparent Governance: An interview

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Ernst & Young helps companies across all industries to deal with a broad range of business issues. Its 103,000 personnel in over 140 countries worldwide can implement solutions in audit, tax, corporate finance, transactions, online security, enterprise risk management, valuation of intangibles and other critical business-performance issues. In an interview with Prachi Verma, Ernst & Young, risk and business solutions practice, national director, Sunil R Chandiramani spoke about the opportunities and the potential offered by e-business solutions and the online world for taxation. Excerpts.
What all e-solutions are being developed by Ernst & Young under taxation? The projects undertaken are focused on simplifying the contact procedure between the citizens and governments as well as improvement of internal processes in various state and local governments. As an example, Ernst & Young currently works with the department of income tax and the empowered committee of state finance ministers in the capacity of a technical advisor and programme manager, on their various technology enabled initiatives. We are currently advising these respective departments to achieve two broad objectives: to make it easier to comply with the requirements by various stakeholders and improve customer service; and to enhance internal efficiencies and capabilities of various functions. As part of this exercise, we are assisting them to build country-wide information and communication infrastructure and also improving customer interfaces for various activities such as tax filing, related queries, grievances cell and dealer registration status. Other than e-solutions development, what are the other activities undertaken by Ernst & Young on taxation? On sales tax, we are assisting governments of two states in their restructuring and redesigning of processes in line with anticipated VAT introduction. On direct taxation, we assist the department of income-tax on various change management and outsourcing projects in addition to the ongoing technology initiatives. We are also proposing to assist various state governments in managing systems security in the new technology environment. The potential for direct e-taxation in the country should ideally be equivalent to the total number of PAN holders, which is estimated at 3 crore with a projected growth rate of 20 per cent What is the potential market size of e-taxation in India? The e-taxation market primarily emerges from two different areas of taxation. The potential for direct e-taxation in the country should ideally be equivalent to the total number of PAN holders, which is estimated at 3 crore with a projected growth rate of 20 per cent. However, as the experience of countries such as US, UK, Singapore and France has shown, the process of attracting taxpayers to utilise e-delivery channels has taken a minimum of 3-4 years. These estimates seem to be consistent in different parts of the world. Hence the situation in India also may not be difficult to reach the level of 70-80 per cent of total filing to happen over the Net. It is also to be noted that perhaps in India, the initiatives have started after a substantial development of technology infrastructure, so that it is within easy reach of taxpayers. Therefore the success and spread of these services will be much faster than that of our counterparts in other parts of the world. The corporate side of the structure is already evident and successful with the introduction of mandatory electronic filing of TDS returns. What forms of online interfaces are available to the citizens on taxation? The online interaction of taxpayers with the department has begun with an introduction of an interactive Web site, which has been adjudged as the second best across all e-governance portals in India. Further, it also allows individuals and companies to download software applications to prepare their respective returns. It also allows PAN applicants to track the status of their PAN processing at each stage of the chain. The department also intends to allow taxpayers to interact and file their returns through the e-filing facility, to be introduced soon. Where will this position India in the next two years? According to the plans of the department that have been made public, the next two years will witness increased activity aimed at improving customer experience, through improved and enhanced services. Some of the initiatives that are underway is to create a central data repository across the nation, outsourcing of PAN processing and TDS data collection, building an organisation wide network across the country and introduction of systems that facilitate data warehousing, knowledge management, Intranets and training.These systems help the department in building robust delivery mechanism, and customer interfaces. Which government departments are involved in this? These initiatives are being given top priority. While the PMO is tracking the progress on a regular basis, the ministry of finance and central bureau of direct taxes (CBDT) take a day-to-day interest in monitoring these initiatives. What will be the advantages of the online version of the taxation model, particularly to the taxpayers? With the online version of taxation, the department would create an environment where the need for a taxpayer to pay respective taxes would be removed and an online, anywhere, any time access mechanism will be created. The benefits will be evident in the form of time saved for the taxpayer, enhanced convenience and easy access. In addition to all this, it will also allow the employees of the department to focus on their core businesses such as assessment and refund. What kind of benefits will this online model bring to the government? Governments across the world have recognised the need to enhance citizen-based services to build a better governance model. Such a model is expected to provide simple and transparent governance to all citizens. With the introduction of new ways of service delivery using enablers such as technology, it is possible to focus on customer service while adequate attention is given to build a robust organisation within. As a result, governance truly becomes an affair of providing superior services to their stakeholders when it is needed most.

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