Coronavirus COVID-19: Centre junks IRS officers' report proposing hike in taxes for super rich, CBDT orders probe

The Union Ministry of Finance on Sunday (April 26) rejected a report titled 'FORCE (Fiscal Options & Response to the COVID-19 Epidemic') by 50 Internal Revenue Service (IRS) officers that suggested raising tax rate to 40% for those with income above Rs 1 crore, from 30% at present, and levy of wealth tax for those with over Rs 5 crore annual income.

The report also proposed charging an additional 4 per cent 'Covid Relief Cess' to meet the government's revenue shortfall and contain the coronavirus outbreak.

Almost 50 young IRS officers submit policy suggestions for reviving India's economy, post COVID 19.#IRS: committed to help build Nation's economic immunity.@PMOIndia @nsitharamanoffc @Anurag_Office @FinMinIndia @IncomeTaxIndia pic.twitter.com/vZVqd9HG5S — IRS Association (@IRSAssociation) April 25, 2020

The Centre junked the report and termed it "irresponsible". An explanation has been sought by the Department of Revenue in the Finance Ministry for what the government has termed as "misconduct" by these 50 IRS officers who had prepared the report.

The Centre has also directed the Chairman of the Central Board of Direct Taxes (CBDT) to seek an explanation from these 50 IRS officers for writing such "ill-conceived views" in public without having any authority to do so. The CBDT has slammed the sugestions and launched an inquiry against the officers claiming that "suggestions on official matters is a violation of extant Conduct Rules."

"An ill-conceived report named 'FORCE' put up by a group of officers through IRS Association giving suggestions on increasing the taxes, etc., in the difficult time of Covid-19 pandemic. The release of proposals in the media through the IRS Association's twitter and the website is "an irresponsible act" of few officers. Neither the IRS Association nor any group of officers mentioned in the said report was ever asked by the Government to give any report on the subject," said the Union Finance Ministry.

(1/3)There is some report circulating on social media regarding suggestions by a few IRS officers on tackling Covid-19 situation.
It is unequivocally stated that CBDT never asked IRS Association or these officers to prepare such a report.@nsitharamanoffc @Anurag_Office — Income Tax India (@IncomeTaxIndia) April 26, 2020

The Centre also distanced itself from the recommendations by the IRS officers and added, "It is not even part of their duty to prepare such a report. It is prima-facie an act of indiscipline and violation of conduct rules which specifically prohibits officers to go to media with their personal views on official matters without taking prior sanction or the permission of the government."

The Centre swung into action after the the report went viral minutes after it was posted using the Twitter handle of the IRS Association. The controverisal report comes at a time when the Centre is making all efforts to earn the trust of industrialists and corporates, following a long spell of economic downfall followed by the loss of revenue caused due to coronavirus outbreak.

Meanwhile, the IRS Association had also disowned the report. "The paper FORCE by 50 young IRS officers suggesting policy measures had been forwarded by IRSA to CBDT for consideration. It does not purport to represent the official views of the entire IRS, or the IT Dept," tweeted the IRS Association.