India has been levying income tax on its citizens for 55 years, and is about to make some much-needed changes to simplify tax laws. India is now the third-largest economy in Asia, and the country is looking for ways to improve doing business.
High-Level Committee Panel Formed
Finance Minister Arun Jaitley has empanelled a new committee that will focus on creating “predictability and certainty” in the country’s tax laws, making it easier to do business. The committee consists of ten members, and is headed up by R.V. Easwar, a former judge of the Delhi High Court. Its first order of business will be to look at revising certain laws and regulations that have lead to tax disputes, and result in protracted litigation that can take years to settle. Many laws contain provisions that are open to interpretation, which is what has been causing a great many legal disputes.
Other committee members will include government financial experts, and individuals from the private sector who will work together to reform confusing laws. The committee will have one year to go over existing laws and determine which ones are most in need of revision. They will find ways to revise the laws, yet still maintain the feasibility of the tax system. They are tasked with completing this job without any adverse effects on existing tax base and revenue.
India Low On World Bank’s Index
The World Bank Ranks India 132 out of 189 countries in its 2015 index of the ease of doing business. Minister Jaitley and Revenue Secretary Hasmukh Adhia are hoping that the new committee will be able to raise India`s ranking in the world, making it a country that foreign companies are willing to invest in. Part of India’s tax problems stem from back-tax litigation the country is embroiled in with Vodafone telecom group, Cairn Energy and others. The panel will not be concerning itself with existing litigation; its aim is to make future business dealings more appealing from a tax perspective.
Initial Recommendations Are Due Early In the New Year
The panel is currently working on setting its agenda, and forming three sub-groups among its members. The first batch of recommendations is due on January 31, 2016, and there will be two more batches of recommendations submitted before the year is up. The committee will share its recommendations with the public during each phase, and accept feedback on its proposals.
The government is hoping to be able to integrate the first round of recommendations into its annual budget, which is due in February, 2016, shortly after the first due date. In the meantime, the government is attempting to resolve as many tax disputes as possible, both in and out of court. Money Bhaskar shares the latest income tax news. Visit the site for more.
