The Central Board of Direct Taxes (CBDT) says it is badly short-staffed.Conservative estimates by a recent report of the special CBDT committee, sentto the government, has recommended that the income tax (I-T) department needsto recruit at least 8,965 officials within the next five years for smoothfunctioning. Their annual cost: Rs 150 crore.

The 8,965 officials include an estimatefor an extra 760 sanctioned personnel in the Indian Revenue Service (IRS). Apartfrom this, the department would have to create 42 posts of Principal ChiefCommissioner of Income Tax (Principal CCITs), 74 CCITs, 116 Senior CCITs andDeputy CITs. “This would have to been done through simultaneous abolition ofposts in other grades,” said the report.

The department would require 61,000 additional officers and staff in the taxdepartment if recruitment is done on the bases of ‘Revenue CollectionApproach’, over 50,000 people under the ‘Expected Tax Payers Approach’ andnearly 15,000 people under the ‘Workload Management Approach’.

Additional staff would also be required for intelligence and investigation.

However, to limit the cost burden on the state exchequer, the report suggesteda conservative way by giving additional responsibilities and suitably upgradingposts in the higher supervisory grades. This also aims to address the existinganomaly in the IRS cadre, where no posts exist in the upper two grades ofHigher Administrative Grade and Apex Scale.

“It is an irony that despite being the highest source of revenue generation forgovernment, lack of manpower and stagnation has plagued the tax department. Thecost of tax collection, at 49 paise for every Rs 100 tax, is the lowest in theworld. And it is only because the department is shockingly low on manpower,”said a senior CBDT official.

Consequently, there was a tax gap of approximately Rs 1,71,653 crore (assumingtaxation at the median rate of 20 percent). ‘Black’ money amounted to over 18percent in the economy and the department’s ability to curb tax evasion iscorrelated to manpower available for investigation, intelligence, assessmentand other departmental work, goes the argument.

Many Assessing Officers (AOs) move their files without adequatediligence, as the workload is high. The report warned that if the number of Aosremained unchanged, the number of assessees per AO annually would increase to11,490 and the scrutiny workload would increase to 230 by the end of 2013. AnAO can handle a maximum of 150 scrutiny files in a year.

At present there are over 33.6 crore registered tax payers in the country,roughly 3 percent of the population.