The following article is an initiative of PwC and is intended to create awareness among readers
Several advancements are happening across businesses, technology, markets and taxes. As businesses are evolving rapidly, and mergers and acquisitions are taking place, there is a need to bring sustainable changes to the tax structure also.
There are many challenges that India has to overcome regarding taxation and to discuss the same with leading minds in the industry, PwC has come up with ‘India Tax Talks’, in association with CNBC-TV18, during which focussed conversations with policy makers, academia and tax professionals are being held on various aspects of taxation.
Under this banner, a discussion was recently held on expectations of industry leaders on tax laws, mergers and acquisitions, and how India can adopt global standards of taxation.
Experts Hiten Kotak, Partner& Leader-M&A Tax, PwC India, Omar Momin, Head- M&A and Business Development, Godrej Consumer Products, Sanjay Jain, Group CFO, Future Group, and MH Qureshi, Head of Tax-Asia Pacific, Genpact, discussed the key things that India needs.
During the discussion, Jain said taxation is an important bearing in the decision making and three things were mainly expected--predictability, simplicity, and transparency.
“These are few simple things, if you allow us to be working in such an environment, I think we are committed to create value for all stakeholders,” said Jain.
The industry leaders also spoke at length about the insolvency and bankruptcy code, and what was required to make the processes smooth.
“I think much better focus on how do we simplify and ensure that timelines are met, not only just by the authorities within the IBC space, but also the regulators. Also, the capacity of the authorities, the NCLT, the NCLAT, will need to be increased in terms of benches, etc. both of these will ensure adherence to timelines and high recovery rate in sense of the dollar that we can have as a system as we used to have before,” said Momin.
Also, taxation for startups was also a part of the discussion and pointed out an anomaly.
“The startups have been given tax exemptions under 8iiC which is a good thing bu the bad thing is there is no exemption from minimum alternate tax. So, while they are not liable to pay tax at say 25%, they would end up paying or getting out of cash to the extent of minimum alternate tax; that is again an anomaly,” said Kotak.
Going forward, Qureshi said that India should, now, have a globalised outlook in taxation.
“A globalised India does need a group taxation. Now, there are several countries who tried this and are very successful. India can do it on a pilot basis and in the interim can follow the UK model. It is high time that we should look at group taxation. There is so much focus on ease of doing business. I think group taxation coming in some form, we can clearly expect great easing of administrative burden,” said Qureshi.
Hence, the experts were quite clear on the industry requirements that are-- predictability, simplicity and transparency.To know more about the discussion, watch the full episode of India Tax Talks here.