Skip to main content

Tax terrorism has returned in India, warns American centre-right think-tank expert

By Our Representative
The American Enterprise Institute for Public Policy Research (AEI), a center-right think tank based in Washington, DC, has warned that tax terrorism has returned in India. AEI's resident fellow Sadanand Dhume, in a strongly-worded commentary in the "Wall Street Journal" (April 7), says, the Narendra Modi government needs to immediately "stop sending mixed messages about its taxation policy" in order to attract investment.
The think tank wonders, "Finance Minister Arun Jaitley needs to decide: Is India to be a magnet for investment, or is it to squeeze every last rupee out of its private companies?", even as suspecting that a "a clutch of finance-ministry bureaucrats" are seeking to derail Modi’s grand plan to remake India’s economy."
"Recent damage to the government’s reputation—among both investors and ordinary citizens—suggests tax officials are on a collision course with the politicians they ostensibly serve. Unless resolved, the lack of clarity in the government’s approach to taxation risks undoing good work in other areas of the economy", Dhume says
He adds, "Speak with businessmen and reform-minded officials in India and a consistent concern will emerge: Tax authorities have brought a wrecking ball to Mr. Modi’s economic party."
Dhume bases his views on the manner in which in March the tax department used India’s "notorious retroactive tax law" to demand $3.3 billion from Cairn India, a subsidiary of Britain’s Vedanta Resources, for transactions dating back to 2007. 
At the same time, he adds, "foreign institutional investors began receiving notices to cough up a so-called Minimum Alternate Tax, which historically had only applied to domestic companies."
"Finance Minister Arun Jaitley declared that the demands could help the government raise $6.4 billion, before backing off amid signs of a stampede away from the stock market", Dhume says.
He adds, "Not content with spooking investors, officials have also proposed that ordinary Indians subject their foreign travel to the tax man’s tender scrutiny. They apparently believe India’s fiscal deficit can be bridged—and wealthy tax evaders snared—by quizzing middle class grandmothers on how much they spend while visiting their grandkids in Europe or the US."
"The government is also reconsidering the controversial new travel-reporting requirements, which kicked up a firestorm of protest on Twitter. Instead Mr. Jaitley has promised to radically simplify income-tax forms", Dhume notes.
"In the absence of philosophical clarity these steps risk appearing piecemeal rather than part of a coherent pattern. Inexplicably, the government has failed to repeal the 2012 retroactive tax law, arguably the single most damaging piece of economic legislation passed since India embarked upon liberalization in 1991", Dhume underlines.
"If the government is serious about fixing this problem, it needs to make up its mind. Is India’s main objective to become a magnet for investment, or is it to squeeze every last rupee out of private companies?", he asks.

Comments

TRENDING

Mallika Sarabhai releases speech she was 'not allowed' to give at NID Convocation on Feb 7

Counterview Desk
The National Institute of Design (NID) in Ahmedabad, a Ministry of Commerce and Industry body, landed itself in controversy following its decision to put off its 40th convocation ceremony, where noted danseuse Mallika Sarabhai was invited as chief guest. The ceremony was scheduled to be held on February 7.

Modi, Shah 'forget': Gandhi’s first Satyagraha was against citizenship law of South Africa

By Nachiketa Desai*
Hindu fanatic Nathuram Godse assassinated Mahatma Gandhi once on January 30, 1948 but his followers raising the war cry of ‘Jai Sriram’ are killing the Mahatma every day. In his home state of Gujarat, Gandhiji was killed a thousand times in 2002 when over 2,000 Muslims were butchered, their women raped, homes and shops plundered and set on fire and even unborn babies ripped out of the wombs of their mothers.

As corona virus 'travels' to rural areas, NGO begins training tribals, marginalised women

By Souparno Chatterjee*
The World Health Organization (WHO) has declared corona virus a pandemic. Originating from Wuhan in China, it has traversed the entire globe, almost, and claimed more than 16,000 lives already. That’s largely the urban population. In India, despite all the preparedness and war-like promptness to safeguard against the pandemic, several lives have been lost , and hundreds of individuals have tested positive.

Rani Laxmi Bai, Tatya Tope 'martyred' by East India Company, Scindia's forefathers

By Our Representative
In an email alert to Counterview, well-known political scientist Shamsul Islam has said that was “shameful for any political party in democratic India to keep children of Sindhias in their flock” given their role during the First War of Indian Independence (1857). In a direct commentary on Madhya Pradesh Congress leader Jyotiraditya Scindia moving over to BJP, Prof Islam has quote from a British gazetteer to prove his point.

COVID-19: Dalit rights bodies regret, no relief plan yet for SCs, STs, marginalized

By Our Representative
In a letter to Prime Minister Narendra Modi, the National Dalit Watch-National Campaign on Dalit Human Rights, endorsed* by several other Dalit rights organizations, have insisted, the Government of India should particular care of the scheduled castes and tribes, trans folks, persons with disabilities and the women and children from these communities, while fighting against COVID-19 pandemic.

Big 'danger' of NPR: A babu can tag anyone as doubtful citizen, Jharkhand meet told

' By Our Representative
People in large numbers from across Jharkhand gathered at the Raj Bhawan in Ranchi to demand that the Hemant Soren government reject National Population Register (NPR) and stop all NPR-related activities. The people’s organisations which participated in the dharna under the banner of the Jharkhand Janadhikar Mahasabha (JMM) resolved to intensify their struggle, insisting, NPR is not a Hindu-Muslim issue but is essentially anti-poor.

Coronavirus scare ‘pushing’ people from Northeast India into more hardship

By Rishiraj Sinha, Biswanath Sinha*
“No one is born hating another person because of the colour of his skin, or his background or his religion. People learn to hate, and if they can learn to hate, they can be taught to love, for love comes more naturally to the human heart than its opposite.” – Nelson Mandela
***

Gujarat govt plan to 'banish' Gandhian activist anti-democratic, unconstitutional

By Rohit Prajapati*
The current Central and Gujarat governments, and their bureaucracy, have been and are still unable to answer and address the concerns raised, with facts, figures, and constitutional provisions, regarding the terror of tourism in the name of the Statue of Unity and tourism projects surrounding it.

Haridwar Swamis lead Khudai Khidmatgar peace march in Delhi 'riot affected' areas

By Our Representative
A Khudai Kidmatgar team, which visited the riot-affected regions along with Swami Shivanand Saraswati and Swami Punyanand, has insisted that India's true heritage is the lesson of ‘vasudhaiv kutumbakam', and it is the responsibility of all to carry froward this legacy. Originally founded by Khan Abdul Ghaffar Khan in 1930, also known as Frontier Gandhi, Khudai Khidmatgar is claimed to have been revived by young Gandhian activist Faisal Khan in 2011.