The initiatives to make India's tax structure simple seem to be gathering steam. Take the case of tax disputes for instance. Currently, more than Rs 750 bn of tax payments have been mired in litigations. This represents close to a fifth of the government's annual direct tax collections. And so, to speed up the process of resolution, the IT department has proposed a national e-management system for quick disposal of tax disputes. This move would not only make optimum use of its work force but also free up resources quickly. The move is part of a series of steps planned by the government to make the overall tax system simpler.




It must be noted that direct taxes now are a major resource provider to the central government. These taxes have grown at an average annual rate of 24% in the last five years. They have nearly trebled to about Rs 3,780 bn in FY10 from Rs 1,328 bn in FY05. Thus, in this regard, the government's move to make the tax system simpler and effective makes a lot of sense. It will be a win-win situation