Union Government has sets up 2 committees to ensure consistency in tax policies Research Unit

The Union Government has been constituted 2 new committees namely Tax Policy Research Unit & Tax Policy Council (TPC) to streamline the taxation policy & administration. These committees have been constituted based on the recommendation of the Tax Administration Reform Commission (TARC) on taxation reform.

Tax Policy Research Unit :

• The TPRU will be headed by the Revenue Secretary. it will carry out studies on related topics of fiscal or tax policies.


• It will assist the TPC in taking appropriate policy decisions and shall prepare tax proposal & analysis of legislative intent.


• It will also take decisions on expected increase or decrease in tax collection & economic impact. It will comprise of officers from CBEC, CBDT as well as economists, researchers, statisticians , legal experts.

Tax Policy Council :

• The TPC will help government in identifying key policy decisions for taxation. It shall aim to have a consistent and coherent approach to the issue of tax policy.


• It will look at all the research findings coming from TPRU and suggest broad policy measures for taxation. The council will be headed by the Union Finance Minister.


• It shall have Nine members – Minister of State for Finance, Commerce Minister, NITI Aayog Vice-Chairman, Chief Economic Advisor & Finance Secretary.


• It would also have secretaries from the department of Revenue, DEA, DIPP and Ministry of Commerce.

Backgroud:

• Taxation policy or administration is handled in the CBDT and the CBEC.


• But there are also 2 independent boards Tax Research Unit (TRU) & Tax Policy and Legislation (TPL) wings which are also sending proposals to the Union Finance Minister.


• TARC in its 1st Report had identified handling of tax policy and related legislation as one of the areas in need of structural modifications.


• In order to bring consistency, multidisciplinary inputs and coherence in taxation policy making, it had recommended establishment of Tax Council supported by a common Tax Policy and Analysis (TPA) unit to cater to needs of both direct and indirect taxes.

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Union Government has sets up 2 committees to ensure consistency in tax policies Research Unit