Sitharaman urges ITRAF to make tax research more visible in policy process

Bengaluru, Sep 16 (PTI) Union Finance Minister Nirmala Sitharaman on Wednesday urged the International Tax Research and Analysis Foundation (ITRAF) to make its independent tax policy research more visible and contribute directly to policymaking and public discourse.

Addressing the Eighth International Tax Conference on ‘New Age Taxation’ organised by ITRAF here, Sitharaman said India had professionals and experts of the highest calibre in taxation but needed stronger institutional platforms to bring their expertise together and contribute to policy choices.

“You have so far contributed quietly, and I would now urge you to contribute visibly, because I understand that the commentary you produce is of such high quality and it reaches the profession, but it should also reach the policy processes, and it should reach the public at large,” she said.

Sitharaman said ITRAF had brought together chief financial officers and tax heads of major technology companies, senior advocates, partners of leading professional firms and academicians who had contributed to international taxation for more than a decade.

She said ITRAF had published seven volumes and organised conferences with institutions including those at The Hague, the London School of Economics and the Chartered Institute of Taxation in London.

Sitharaman also praised the contribution of tax policy expert Parthasarathi Shome, who chairs ITRAF, recalling her interaction with him after she became Minister of State for Finance in 2014.

She said she had valued a report submitted to the government by Shome and had gone back to it on several occasions.

Drawing comparisons with institutions abroad, Sitharaman referred to the Institute for Fiscal Studies in the UK, the International Bureau of Fiscal Documentation in Amsterdam and the Oxford Centre for Business Taxation, saying such institutions had contributed to tax policy debates through independent research and analysis.

“India has economists of first rank, tax lawyers of first rank, and chartered accountants of first rank again, but what we have had less of is the institution that brings them together and gives their work a standing,” she said.

Sitharaman said she would like to see ITRAF emerge as India’s leading independent institution for tax policy research and analysis.

“Independent tax policy research should become a regular part of our public discourse, and it should be visible enough to be examined, challenged, and improved. That is how good ideas acquire credibility,” she said.

She said consultation in tax policymaking should go beyond allowing stakeholders to place representations on record and should instead involve evidence, experience and ideas.

“Those outside government often see the practical consequences of a provision before we do, in the government that is, and that knowledge can materially improve policy,” she said.

Sitharaman said academics, researchers and think tanks had an important role in improving the quality of tax policy discussions.

She said a large part of representations made during pre-Budget consultations traditionally centred on demands to reduce a tax rate, provide an exemption or grant a concession.

“But a mature tax policy debate must go beyond sectoral consideration,” she said.

The finance minister urged tax professionals and researchers to also identify provisions that no longer served the tax system, even when their own sectors benefited from them.

She said proposals seeking changes in tax provisions should quantify the number of taxpayers affected, the compliance cost involved and the revenue implications of alternatives.

“If a change is proposed, show us not only who gains from it, but also its consequences for the tax base itself, administration, and other taxpayers,” she said.

She also asked professionals to examine possible unintended consequences of their recommendations and put the national interest ahead of narrow sectoral considerations.

“The question should not only be, what should my sector get in this year’s budget, but the larger question should be, what kind of a tax system should India have over the next two decades as we move towards Viksit Bharat (Developed India) 2047,” she said.

Sitharaman said this required research that examined proposals from all sides, measured their effects, recognised trade-offs and, wherever possible, offered workable alternatives.

She said ITRAF could contribute to policymaking not merely by responding to tax measures but by helping shape the choices from which tax policy emerged.

Sitharaman also welcomed the conference agenda, which focused on emerging issues including significant economic presence, virtual permanent establishment and taxation of artificial intelligence and robotics.

“What struck me most is that there is not a single session on rates, exemptions, or deductions. For a conference of this seniority, that’s a notable choice and a welcome one,” she said.

She urged ITRAF and participants to submit concrete policy alternatives rather than only general grievances.

“First request, share with us drafted tax policy alternatives and not only general grievances,” she said.

Sitharaman said research measuring compliance costs, identifying the number of taxpayers affected or modelling revenue implications would be more useful for policymaking than criticism that remained qualitative.

She said tax policy should support investment, enterprise and innovation while ensuring adequate revenue for development.

Sitharaman called for continuing dialogue among the government, industry, professionals, academics and institutions such as ITRAF to identify emerging tax issues early, examine them objectively and work towards practical solutions.

She said the government remained committed to ensuring that India’s tax system evolved with the economy and remained responsive to change, predictable for taxpayers and supportive of the country’s wider economic objectives. PTI GMS SA

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