Faced with an unprecedented situation, and with economic and social conundrums the like of which haven’t been seen since World War II (if then), governments internationally have been obliged to fight on several fronts at once, attempting to ensure support and resources for their health systems, whilst seeking to bolster stuttering economies and suddenly impoverished populations, in the hopes of preventing short-term destitution and long-term hardship.
Moves in this area over the past week have included in India, where Prime Minister Narendra Modi on March 24 ordered the country’s population of 1.3 billion into lockdown for three weeks. However, in addition, the Indian authorities announced various tax measures to support businesses and individuals. These included that:
The deadline for FY18-19 income tax returns has been extended from March 31, 2020, to June 30, 2020.
The Aadhaar-PAN linking date is to be extended from … Read More »
At the start of August, the Indian authorities published in the country’s official Gazette the measures announced in the July 5 budget, which have since received Presidential Assent. Among the key measures contained in the budget were provisions to ensure that the scope of the lower 25 percent corporate income tax rate will be expanded to cover the vast majority of Indian businesses, with a figure of 99.3 percent having been mooted.
Previously, the lower 25 percent rate is levied on those businesses with turnover not exceeding INR2.5bn (USD36.5m), and on manufacturing firms. This threshold is being raised to INR4bn.
Other salient tax measures in the Budget, in addition to measures impacting individual taxpayers, included the launch of a new dispute resolution service to resolve legacy service tax and excise duty-related disputes; confirmation that there will be a single monthly GST return … Read More »
The Indian Government announced in the recent Budget that the scope of the lower 25 percent corporate income tax rate would be expanded to cover 99.3 percent of Indian businesses.
Currently the lower 25 percent rate is levied on those businesses with turnover not exceeding INR2.5bn (USD36.5m), and on manufacturing firms. This threshold will be raised to INR4bn.
The Budget also confirmed a number of administrative simplifications, including the introduction of a single monthly GST return. The Budget also proposes to extend, until March 31, 2021, the exemption from capital gains tax on gains arising from the sale of a residential house where the capital is used to invest in a start-up. The Government said it would also relax the eligibility conditions.
For more information on this, and other topical international tax matters, please visit: https://www.cchgroup.com/roles/corporations/international-solutions/research/global-tax-weekly-a-closer-look
It’s not been a good time for taxpayers in many jurisdictions lately. India, for example, is infamous for its complex tax rules and capricious tax inspectors. It’s just the sort of place where you need a neutral authority standing in between taxpayers and the tax man to arbitrate disputes. Like an ombudsman. Except that the Indian Government has just decided to abolish its income tax ombudsmen service. Oh dear.
Apparently, according to the government, the ombudsman service is being shut down because it hasn’t achieved its objectives, and because taxpayers are increasingly turning to alternative forms of dispute resolution mechanism. That the ombudsman’s office has been effectively squeezed out by the competition probably tells you all you need to know about India’s tax system. Dispute resolution must be a lucrative market indeed!
For more information on this, and other topical international tax … Read More »
Tax is something that most people merely grin and bear, albeit through gritted teeth. But it’s sometimes much more exciting than that. Indeed, it can change the course of history. Think the Boston Tea Party or Magna Carta. America might still be ruled by Britain, and Britain ruled by kings and queens, or portly prince-regents with more interest in pies than the parliamentary process. All (or largely) because of tax.
In many countries, 2018 ended in an inferno of tax-motivated protests. Not quite revolutions, but fervent enough to change a government’s mind. The “gilet jaunes” demonstrations in France was the most widely-reported example. But the movement has seemingly inspired similar tax-motivated outcries as far afield as Canada and Taiwan. The streets of Jordan’s capital, Amman, have also reverberated to the sounds of anti-tax protests recently.
Tax cuts, on the other hand, never, … Read More »
India’s 2018 Budget barely registered a blip of the excitement scale. But it is still worth mentioning for a number of reasons. Not least because Finance Minister Arun Jaitley has managed to upset pretty much everybody with some unpopular – some observers say misguided – measures. I thought it was in the politician’s DNA that, as a minimum, they at least attempt to please some of the people, some of time, so this could be considered something of a rate feat.
For a Government that has prioritized foreign investment and improving its “doing business” ratings, this is a strange Budget indeed. Investors have immediately seized upon the proposal to reintroduce a tax on long-term capital gains, which was replaced by a securities transactions tax back in 2004. However, the latter tax remains in place, increasing the prospect of cascading taxation for … Read More »
Importers of solar panel equipment in India are probably feeling very aggrieved at their Government at the moment, after it announced a proposal to slap a 70 percent tariff on such products sourced from China.
India may well be justified in pursuing this somewhat drastic measure. After all, it wouldn’t be the first time that China has been accused of selling its products around the world too cheaply to the detriment of local producers (local consumers, who of course benefit from low prices, never seem to count!). But trade disputes are rarely clear cut, and it seems that few parties ever come out of them completely undamaged. So it might not be India’s smartest move.
Furthermore, this story was notable because it adds to a growing trend for governments to tax the production and consumption of renewable energy, surely a policy completely at odds … Read More »
Major tax reform efforts are often undertaken with the intention of making life easier for taxpayers. But they can be enormously disruptive for tax planning in the short-term, as taxpayers adjust to life under a new regime. Spare a thought then for taxpayers in India. There, they are still getting used to the idea of the national goods and services tax, often described as one of the most significant economic reforms in India’s post-colonial history. Now they could be faced with a shake-up of direct taxation as well.
By putting in place the GST regime this year, the current Government was congratulated for achieving in three years what the previous administration failed to do in ten. Will it be able to pull off a similar achievement with the direct taxes code?
Reforming the outdated direct tax regime in a similarly expedient manner would represent … Read More »
India’s indirect tax reform promises to be a transformational, generational change that will unleash the full potential of this sleeping economic giant while modernizing the tax system and widening the tax base. And the Government deserves a great deal of credit for driving the reforms through in the face of hostility from state governments and with a political opposition which initially opposed the reforms for opposing’s sake (ironically, the same opposition that proposed GST in the first place when in government some years ago – that’s politics for you!).
Nevertheless, this is a reform made by committee i.e. it recognizes several competing interests and consequently is one big, far-from-perfect compromise. And this is reflected in the somewhat complex three-tier state/central/interstate regime, which effectively has two standard rates (one is the norm), in addition to a reduced rate and a “luxury” rate.
One suspects … Read More »
I’ve watched India’s GST debacle from the bitter beginning, and had formed the belief that, after year upon year of broken promises, the tax would never see the light of day. However, now, I’ve been pleasantly surprised by the uncharacteristic speed with which some of the final, essential steps needed to implement this long-awaited tax reform have been taken.
The Rajya Sabha’s landmark vote in favor of the tax took place in August, and by early September more than half of India’s states had ratified the constitutional amendment bill, removing a major roadblock to the introduction of GST. By the end of the month, the GST Council had been formed and already resolved the tricky question of the GST registration threshold. The digital framework underpinning the new tax is already well advanced, and there is the very real prospect that GST … Read More »