The tax statute will explain what your rights are

The decision to introduce a letter from the taxpayer as part of a statute is considered a positive step. A letter defines the rights of a taxpayer and the obligations of the tax department.

Hitesh Gajaria, co-director of taxes in KPMG India said: While the outlines of the letter have not yet been defined, it will lead to greater responsibility and will send a strong signal that the government intends to be taxpayer friendly.

“We want to enshrine a letter from the taxpayer through this Budget. Our government remains committed to taking measures to ensure that our country is free from fiscal harassment of any kind, ”he said in his speech on the budget.

In a recent report, the Prosecutor had stated that in order to ensure that the rights of taxpayers were protected in the real sense, the promulgation of said letter was necessary. Up to 40 countries (of the 42 respondents) had an established letter, but only in 33% of these was legally effective.

Live plus Countries like Belgium, Brazil, Chile, Italy, Kenya and Mexico have the letter as part of their statute, similar to the proposal made by the finance minister. While Australia and Canada have an established letter, it does not have the protection of a law. The Netherlands, on the other hand, has avoided a letter altogether, claiming that the rights of taxpayers are sufficiently registered in various tax laws.

Sitharaman said that any tax system required trust between taxpayers and the administration, adding that this would only be possible when the rights of the former were clearly listed.