Business
Tax system being overhauled: Jaitley
London, March 14
Seeking to soothe the
sentiments of foreign investors, disturbed by fresh claims of tax on
past transactions by Indian authorities, Finance Minister Arun Jaitley
has said his government was rationalising the country's tax system to
make it fair.
"We are trying to rationalise taxes - that is,
lower taxes and introduce a non-adversarial and fair systemâ€" the
finance minister told an event co-hosted over the weekend by the
Federation of Indian Chambers of Commerce and Industry and UK-India
Business Council.
"We need a lot of investment in India. We need
to ease the process of doing business. Therefore, slowly we are
introducing changes in that direction," he said, adding a fair and
equitable tax system was a top priority.
The finance minister's
comments came against the backdrop of the tax authorities slapping a
$3.2-billion capital gains tax on Cairn India, a part of the Vedanta
Group, for a transaction that took place some 10 years ago.
This
tax, which was not explicitly in existence at that time, was introduced
in 2012 with retrospective effect and has been a cause for much concern
among foreign investors. Such retrospective tax is against the present
government's stated policy.
Britain-based Vodafone faces a
similar dilemma and so do some 30-odd companies. But the finance
minister, while not raising the issue directly during his various
addresses, only stated what he has been maintaining in the past.
"We
are correcting the aberrations in the taxation structure," said the
finance minister, who is on a two-day visit here on his way back to
India from the US.
"Our roadmap is very clear," he said,
referring to the policies being pursued by the Narendra Modi government.
He also made specific reference to Modi's Make in India initiative.
Jaitley
also touched upon the latest coal and spectrum auctions that have
evoked much interest, beyond the government's expectations. "The success
of these auctions demonstrate how corruption can best be avoided and
fetch high values," he said.
He also made a political statement
without directly referring to the the previous United Progressive
Alliance (UPA) regime's prime minister Manmohan Singh.
"If he'd
had his way, the crisis would never have taken place," said Jaitley,
adding that even though the previous government had announced the coal
auctions soon after it took over in 2004, it was unable to do so for the
next 10 years.
"How can one allow such a system to continue," he queried.
Jaitley,
who also held a series of meetings, notably with Leader of Opposition
Edward Miliband and Indian-origin lawmaker Keith Vaz, and also with
Chancellor of the Exchequer George Gideon Oliver Osborne, said India was
now on a high growth path.