Reforms to help reduce tax rates: Chidambaram

Nagpur, Apr 12 (UNI) Union Finance Minister P Chidamabaram today said reforms to be made in the tax administration and collection system would bring down the prevailing rates of direct taxes.

Addressing the valedictory function of the training of 58th batch of Indian Revenue Service (IRS) probationary officers at the National Academy of Direct Taxes ( NADT) here, Mr Chidambaram said, ''Contrary to popular perception, the prevailing tax rates are not the final resting point and it is possible to bring them down further.'' However, he said reducing the tax rates is not a simple process of altering the number in chapter I of Finance Bill every year, but it has to be a culmination of reforms in tax laws, tax administration and the attitude of tax administrators.

He said, at present there are 30-35 millon tax payers in the country and the most important reform would have to be in the attitude of tax administrators, as there would be a considerable increase in the number of tax payers in future. ''There should be proper understanding between tax collectors and tax payers, if any dispute arises and the system should be more transparent,'' he said.

Asserting that the Government could no longer rely on ''blunt instruments'' like search and seizure, the Finance Minister said modern technology has enabled the taxman to obtain a wealth of information on financial transactions of individuals.

He advised the officers, who actively work in the field after completing their training, to take decisions on the basis of logic and objectivity and not to worry that a certain view might not be upheld finally.

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