Capacity building for an effective and future-ready direct-tax department

Abstract

The Income Tax Department has sanctioned strength of 76000 (approx.) employees which includes around 5000 Group A officers. The Department is undergoing a transition where Information Technology is being used to improve taxpayer services and to make the tax processes and administration effective and efficient. Information technology is an important tool for capacity building of the organization and its employees. However, the tools based on subjects of Behaviour science, psychology, data science etc can also be used to bring holistic change in the organisation. Recently Govt of India has launched Mission Karmayogi which is a National Programme for Civil services Capacity Building (NPCSCB). Under this programme, Civil Servants are provided an opportunity to upgrade their skills through online training courses. Integrated Government Online Training (iGOT) is the online platform through which online training courses are delivered. To develop this policy paper the reports of international organizations like OECD, World Bank, UNDP etc has been studied where the tax administrations of developed countries like United States, Australia, Singapore, United Kingdom has been discussed. World over the tax administrators are improving their taxpayer services by adopting three approaches ie skills training of its employees, Behavioural studies on taxpayer and use of Information Technology. This paper focusses on such alternative ways to build the capacity of the Direct Tax Department in India to make it future ready. The alternatives are based on the analyses of the research papers and reports written on the subject. Behavioral studies employ research-based techniques to understand the behaviour of the taxpayer. This method is being used to devise tools which can increase the voluntary compliance. This paper highlights the benefits of setting up Behavioral Insight Units (BIUs) in the Income tax Department to study the taxpayers’ behavior and accordingly device the most appropriate tools. Apart from the Behaviour Insight Units this paper also highlights the importance of updating the computer skills of the employees to make them independent while running various information technology tools. Further, with the advent of faceless schemes, the work culture has now changed from individual based to team based. This also require developing the group decision making skills for qualitative outcomes. In the near future, the working in the Department will require advanced Information technology tools such as Artificial Intelligence (AI), Blockchain etc to analyze the Big data as well as to provide prompt taxpayer services. This will require understanding of data science and data analytics. To implement these changes there may be challenges like resistance to change, lack of support from leadership, developing Pro change coalition, maintaining the momentum for long term change, Legal Issue, manpower issues etc. It is therefore important to tread the path in small steps. The Capacity building of the Direct tax Department is a long-drawn process which require sustained efforts and motivation.