Top environmental group Environics Trust has demanded that India should stop the current race to reach “the bottom of corporate taxation”. Demanding that India should lead the way to stop the “relentless race to the bottom of corporate taxation”, it said, “In the past few years, we have seen dramatic reduction in corporate taxes with a concurrent increase in indirect taxes, tolls and user fees which burden the poor.”
“Several other tax incentives, some in the name of ease-of-doing-business and some in the name of Covid have boosted the corporate profits, which is reflected in the soaring stock market indices”, the statement says, adding, “This is a time when the unemployment rates are touching the highest levels since independence, fuel prices have sky-rocketed – while global crude prices remain subdued – and health and education burden on the poor is breaking their backs.”
The NGO said, “In midst of such circumstances, the Organisation for Economic Co-operation and Development (OECD), G-7 and G-20 are pushing for a minimum global tax of 15 per cent. In our country we have witnessed that any attempt at fixing minimum, ends up being the norm, the greatest example being workers’ wages. Most corporates think that minimum wages prescribed is what is to be paid, so will it be with the taxes.”
“We categorically reject the idea of 15 percent tax on the corporates”, the NGO said, adding, “The minimum must be pegged higher, as almost all countries have various incentives which are location or category based. Since markets are perfectly imperfect, the idea of competition reducing prices for the consumer is completely untenable. We are seeing that products which have very little intrinsic value are priced very high and corporate revenues are delinked from such considerations.”
“Therefore”, it demanded, there should be “a restoration of tax to a minimum of 30 percent of the profits of all corporate entities and ensure a complete closure of all tax havens and jurisdictions that allow for such manipulation. Taxes must be paid to those from who revenues are generated. We demand fair and progressive tax structures across the globe and not the G-7/G-20/OECD tax deal.”
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