India spending $170M to take its tax system paperless by rebuilding three legacy systems

Let's see how this goes

India has decided to rebuild the platforms it offers citizens to process their taxes and make the system paperless.

The initiative, called the "PAN 2.0 Project," was approved on Monday by the Cabinet Committee on Economic Affairs (CCEA), a government organization that evaluates proposals related to public investment, chaired by Prime Minister Narendra Modi.

Currently, the Permanent Account Numbers (PAN) database holds 780 million PANs and nearly 7.33 million Tax Deduction and Collection Account Numbers (TANs). PAN-related services are spread across three different platforms.

The project plan calls for PAN and TAN-related services currently accessed at multiple portals to be consolidated into a single platform, accompanied by an effort to digitize records.

The price tag for PAN 2.0 is expected to come in at Rs 1,435 crore ($170 million).

"PAN 2.0 Project is a one-stop platform to comprehensively address issues/matters related to PAN and TAN, including application, updates, corrections, Aadhaar-PAN linking, re-issuance requests, and even online PAN validation," explained India's Ministry of Finance.

The process also results in PAN consolidating into a digital identifier to be used across government services, much like the UK's National Insurance or the US's Social Security numbers, or even like how India's already existing 12-digit Aadhaar was intended.

The government pledged to keep all personal and demographic data protected through enhanced security measures, including a PAN Data Vault. It also promised taxpayers a seamless, transparent, and inclusive system.

"The project will also make it easier for users to apply for PAN/TAN online, update their details, and validate PAN information digitally," the government said in its notice.

The project aims to enhance security, speed up processing times, and add a simplified grievance resolution system.

The system envisioned as the outcome of PAN 2.0 Project has the potential to improve user experiences and enhance service delivery, assuming everything goes right.

Which is seldom the case on such all-encompassing programs.

New Delhi has not set a deadline for completion of PAN 2.0, or explained if the work will be done in-house or outsourced as was the case when Infosys was engaged to develop a Goods and Services Tax (GST) portal.

That work did not go as intended, with a planned 2021 launch failing badly enough for the government to revert to manual tax filings within a week.

So buggy was the portal that India's Central Board of Indirect Taxes and Customs (CBIC) had to extend due dates for tax filings and payments.

And as for keeping its security tight, it's a hard claim to make. The nation's Aadhaar digital ID scheme has been breached with records found for sale for a mere Rs 500 ($6) in 2018. Since then, the national ID has been found in other databases up for sale.

The Register hopes that years from now we don't need to write about PAN 2.0 becoming a sprawling, open-ended mess. ®