TLI Staff
New Delhi: Taking strong exception to the ‘FORCE’ report by enthusiastic tax officers proposing to raise income tax to fight Coronavirus crisis, Finance Ministry has asked the taxmen to explain for their misconduct.
Officers at the North Block termed the Fiscal Options & Response to the COVID-19 Epidemic (FORCE) report as ill-conceived and completely irresponsible.
Indian Revenue Service (IRS) Association has also junked the report saying it had no role in making recommendations.
“The paper ‘FORCE’ by 50 young IRS officers suggesting policy measures has been forwarded by IRSA to CBDT (Central Board of Direct Taxes) for consideration. It does not purport to represent the official views of the entire IRS, or the IT (Income Tax) dept (department),” the association wrote on twitter.
Finance Ministry sources said that the suggestions including a hike in income tax rate in the difficult time of Covid-19 pandemic and releasing the same in the media through IRS Association’s twitter and website is an irresponsible act of few officers.
The officials are deeply annoyed by the actions of income tax officers as such recommendations were never sought by the government.
“It is prima-facie an act of indiscipline and violation of conduct rules which specifically prohibits officers to go to media with their personal views on official matters without taking prior sanction or the permission of the government,” an official said.
While officers involved in making the suggestions are being asked to explain their misconduct, the Finance Ministry is learnt to have asked CBDT to take the officers to task for presenting ‘ill-conceived views’ in public without being authorised to do so.
The Ministry completely distanced itself from the FORCE report and urged people not pay any heed to it. The official quoted above said that Finance Ministry was doing its best to provide relief and liquidity into the system and ease the lives of people in these trying times.
Amid plummeting tax collection and economic activities coming to a standstill following the nationwide lockdown, the authors of FORCE report suggested various short term and medium term measures to mop up collection.
They proposed a higher tax regime for ‘super rich’ taxpayers. The officers proposed to raise the highest slab rate to 40 percent for those with total income above Rs 1 crore from 30 percent at present and re-introduce wealth tax for those with a net wealth of Rs 5 crore.
Another key suggestion was to increase surcharge paid by foreign companies on income earned from their Indian branch offices or permanent establishments.
“They said surcharge has not been revised from long time. With companies operating in India and deriving profits through their permanent establishments, it is time that a flourishing market like India, with its huge prospects, flexes its customer base muscle,” the FORCE report said.