CAG chief says tax law simplification exercise should become template for wider govt reforms

Murthy urged government departments to replicate the Income Tax Department's simplification exercise, saying integrated systems and simpler processes can reduce compliance and administrative costs.

Comptroller and Auditor General Chairman K. Sanjay Murthy at the launch of 'The Syntax of Tax: The Story of Income Tax Law Simplification', a book documenting the exercise carried out by serving and retired Indian Revenue Service officers. Udit Bubna | ThePrint

New Delhi: Comptroller and Auditor General (CAG) chairman K. Sanjay Murthy Monday called for the Income Tax Department’s exercise to simplify tax laws, rules and forms to be used as a model for wider administrative reforms across government, particularly in integrating databases and simplifying processes for citizens and businesses.

Speaking at the launch of ‘The Syntax of Tax: The Story of Income Tax Law Simplification’, a book documenting the exercise carried out by serving and retired Indian Revenue Service (IRS) officers, Murthy said the work should not end with documenting how the tax framework was simplified but should be converted into case studies for other government departments facing similar challenges. The exercise culminated in the Income Tax Act, 2025, which came into effect on 1 April 2026.

“This will need to be translated or put into as a use case for all those numbers of cases that you study,” Murthy said, pointing to its relevance for municipalities, departments and states working to create single-window systems.

The CAG chief said government departments continue to face problems because of a lack of integration between databases and processes. These gaps, he said, increase the cost of compliance for citizens as well as administering government work.

He said the tax simplification exercise showed that meaningful administrative reform is possible if there is “will and dedication”, and urged departments and state governments to learn from the experience.

“Each state is working on a single window system, trying to make doing business easy there. The book has many stories for all of them to learn and pick up,” he said.

Murthy also highlighted the role of junior officials, saying innovation and expertise were not restricted to senior levels of government. He praised the authors for creating an environment where younger officials could contribute to such a large exercise.

The CAG chairman also described the pace of the tax simplification exercise as significant. Referring to the work undertaken between 2024 and 2026, he said completing an exercise of this magnitude in such a short period was “quite unheard of”.

He said the transformation in the tax administration system over the last decade was “unimaginable”, particularly in the context of ease of doing business and e-filing.

The book chronicles how the Income Tax Department examined and redesigned the Income Tax Act 2025, combining the legal and administrative aspects of the exercise with anecdotes and humour from officials involved.

The book’s authorship is attributed collectively to ‘Serving and Retired IRS Officers’, to preserve not just the outcome of the reform but also the discussions and iterations behind simplifying tax laws.

(Edited by Viny Mishra)