JOIN USIndia offers stable and friendly tax regime, says FM
Allying fears of global investors over taxation issues, Finance Minister P Chidambaram said on Thursday that India offers a stable and non-adversarial tax regime besides a fair and just dispute redressal mechanism.
Chidambaram, who was on a two-day official visit here, said that steps being taken by the Indian government with regard to taxation were in tandem with the international best practices.
“A developing country needs resources, especially tax revenues and I have stated that our policy is stable tax rates, clarity in the laws, a non-adversarial tax administration, and a fair and just dispute redressal mechanism,” he said in an interview to an Arab TV channel.
When asked about the apprehensions of investors that new ways were being worked out to get more taxes from them, Chidambaram said he did not see any reason for such concerns.
He however added that in certain aspects the steps taken by India with regard to taxation mirror the concerns being actively discussed by the Organisation for Economic Co-operation and Development (OECD).
Global investors expressed concern over the decision of the Indian government to set aside a Supreme Court judgment in the Vodafone case through retrospective amendment to the tax laws. The governent, however, is trying to find a solution to the vexed tax issue.
He said, “India is host to several global corporate giants; many high–tech global players have set up software development centres in India, and about 306 Fortune 500 companies have established their regional headquarters in India," Chidambaram said, while referring to the strength of India, which continues to be one of the leading software service providers to the world.
He said the government has taken steps to make India more attractive for foreign direct investment (FDI). FDI limits have been increased in several sectors, including retail and telecom, and restrictions in banking sector have been eased, he said, adding “policy in India is clear and that is why have been able to attract strong FDI flows that total $309 billion since April 2000.”
The policy on FDI in retail needs initial local sourcing. Many products sold in multi brand retail stores can be- and in fact are being- produced in India, he added.