Marc Levey, a transfer pricing partner with Baker &
McKenzie in New York, opined that
transparency by a taxpayer with the revenue team will help
developing the relationship between the two. Further, he stated
that a lawyer / consultant is a connecting thread between
taxpayer and administrator, so he has to understand the
perspectives of both of them to help build an 'enhanced
relationship’.
Bela Mao, head of tax in India for Shell, opined that an
enhanced relationship would encourage voluntary compliance
by taxpayers. She also believed that if taxpayers are honest,
then the revenue authorities will also look at situations
pragmatically. She further stated that enhancing relations
would have the effect of reducing litigation to a certain
extent.
Shanker Iyer, of the Iyer Practice in Singapore, shared his
experience of the Singapore revenue authorities. He described
it as a very authoritarian regime in early days. The revenue
authorities were neither approachable nor could be questioned.
But over a period of time, he noticed changes in their
attitude. He stated that they are much friendlier and
approachable now.
Trust and confidence
Kamlesh Varshney, head of the India Tax
Department’s APA progamme, gave his
organisation’s perspective on the enhanced
relationship. He explained that it works both ways. "We have to
move forward to build trust & confidence," he said. He gave
an example of a UK company being boycotted by its customers for
not paying taxes. He emphasised that such a change in culture
should take place in a developing country too. The attitude
should be "It’s an honour to pay taxes". He also
said he supported the exchange of information, which he said
will help enhanced relationship between countries.
Bijal Ajinkya, a partner at Khaitan & Co, emphasised
that cooperation by taxpayers is something that will enhance
relations. She added that a taxpayer should explain their
business well to the tax authorities in light of various
complexities in tax structures. The revenue should also be able
to discuss the judicial approach with the taxpayer. "We need
then to come to common understanding between the two. This will
help build an enhanced relationship," she said.
Ajay Vohra, managing partner of Vaish Associates, who
chaired the panel, supported the arguments of the panellists
and stated that the revenue officers in charge need to be
educated.
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