Millennium Post

For the people

For the people

In 2019, while presenting the Union Budget 2019, the Finance Minister proposed a faceless assessment system for tax filing. The new system would, generally speaking, ensure that taxpayers do not have to come into contact with any officials in regards to income tax filings and the disputes that may arise. Instead, these traditionally face-to-face assessments would now be carried out online by an automatically allocated e-assessment centre. Great emphasis was put on creating a system that would ultimately benefit 'honest taxpayers'. These honest taxpayers are indeed at the heart of the whole initiative as Government messaging in 2020 made apparent. While announcing the launch of faceless assessments, PM Modi stated that "Honoring the Honest," was the new motto at play. He envisioned the new system as a way of making a seamless, painless and faceless tax regime which would take the idea of being people-centric as its primary guiding point. In time, PM Modi hopes that such initiatives would fix one of the central problems of the tax regime in India — the fact that quite simply, the number of taxpayers in the country is still low in relation to the nation's total population. Addressing this issue would require a buildup of comfort and trust in the tax regime by the average taxpayer.

The current system is not conducive in this regard and may indeed have contributed to the generally maligned image of the tax regime in India. The regionality of tax filings means that the taxpayer is very much at the mercy of the assigned tax officer of the area. Naturally, this creates a system that is ripe with the opportunity for exploitation at several stages of the process. Now, the only link between a taxpayer and regional e-assessment centre would be the newly constituted National E-Assessment Centre (NEAC). NEAC shall centralise all communication in this regard, with the collection of information, documents, evidence, etc., being undertaken at a central level. Furthermore, every stage of the assessment has been distributed to a wider chain of regional centres to further limit the scope of influence or interference in the whole process. Finally, the assessment will benefit from the collective decision making that forms its basis as opposed to the individual discretion of a single officer.

At a time when COVID recovery is the name of the game, the new system has been appreciated by many though, naturally, it has its detractors.

The dissent started as early as the scheme was announced and was presented on several levels with the most basic dealing with the logistics behind transferring officers to their new posts at regional e-assessment centres. Other criticisms take aim at the online nature of the whole process, a factor with its own security and general logistical challenges. Still others have taken an issue to the faceless assessments supposedly making the assessment process difficult and erroneous without the face-to-face component. This complaint assumes that the digitalisation of the process would be limiting and time-consuming as compared to the previous method, not to mention more prone to inaccuracies. In this regard, comments made by the judiciary have not helped matters with a recent comment as part of a high court order noting that faceless assessments have more scope for error with the officers not being able to understand the transactions and statement of accounts without face-to-face meetings. The barrage of dissent continues and will likely continue for some time.

But this is to be expected. Change is a difficult process to push through a bureaucratic system, particularly if vested interests are trying their level best to keep things unchanged. Shifting the power dynamic by making assessments random and faceless can be problematic to those who seek to take advantage of the system, as can the maintenance of easily accessible digitalised records. All the same, there is little doubt that the new system will have significant challenges to overcome in the short run and perhaps even more in the longer run. It is, however, unreasonable to expect that these kinks would not be ironed out in the initial setup phase, particularly with timely public-private partnerships covering any capability or infrastructure gaps that may arise early on. It is even more absurd to go against a positive change due to the fact that implementing it would be challenging. In a time when 'Aatma Nirbhar Bharat' has become an oft-quoted catchphrase for the new India, bringing power to the people is the exact right path to follow. In fact, the faceless model can go a long way in tackling corruption and exploitative tendencies in other systems as well. The time for radical changes is now.

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