Apropos the editorial, "End tax uncertainty" (August 24), the tax regime has turned imprudent, especially for corporates, over the past few years; now it has started taking its toll on investor sentiment as well. Higher taxes are crimping the balance sheets of global companies, which will dampen India's efforts to boost foreign investments in crucial sectors.
The never-ending risks of a sub-normal monsoon, deterioration in rural demand and government policies such as expansion of subsidies are burdening the country's finances. Transfer pricing disputes have risen dramatically, skyrocketing from Rs 12 billion to Rs 700 billion in the past decade.
Moreover, there is a huge rise in complex business transactions, which need time to be understood as there is little or no guidance for the officer who makes the assessment. Although multinational companies hire the best consultants and experts, there is still a gap in their understanding of the law. The revenue department is yet to bridge this gap.
Vivek George Alappuzha
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