The Tax Administration Reform Commission (TARC), set up by the Finance Ministry to suggest measures to prevent economic offences among other things, is expected to submit its report in six months, TARC Chairman and Advisor to Finance Minister Parthasarathi Shome said here on Monday.
The Commission held its first meeting here on Monday.
The term of the 7-member TARC is 18 months, and it will work as an advisory body to the Ministry of Finance.
The terms of reference of the Commission include a review of the existing mechanism of dispute resolution and methods to widen tax base.
The TARC will also recommend measures to strengthen inter-agency information sharing between Central Board of Direct Taxes (CBDT), the Central Board of Excise and Custom (CBEC), the Financial Intelligence Unit (FIU), the Enforcement Directorate, and also with banking as well as financial sectors.
It will review the existing mechanism and recommend measures to enhance predictive analysis to detect and prevent tax and economic offences, said an official statement.
Besides, it will recommend a system to enforce better tax mechanism — by size, segment and nature of taxes and taxpayers that should cover methods to encourage voluntary tax compliance.
The statement said the Commission will be supported by a Secretariat and have its headquarters in Delhi. It will be provided information and quantitative data of CBDT and CBEC to do statistical analysis for making recommendations.
“An emerging economy must have a tax system that reflects best global practises. I propose to set up a TARC to review the application of tax policies and tax laws and submit periodic reports that can be implemented to strengthen the capacity of our tax system,” Finance Minister P Chidambaram had said in his budget speech.
The members of the Commission are: Y. G. Parande, Sunita Kaila, M. K. Zutshi, S. S. N. Moorthy, M. R. Diwakar and S. Mahalingam.
The Commission will again meet on Tuesday.