The change in withholding tax to 5 percent from 20 percent is going to be a game changer for the bond markets, says Jayesh Mehta, managing director & country treasurer, Bank of America.
Ketan Dalal, jont Leader-Tax and Regulatory Services at PwC, says that from a lender perspective the issue is whether the he is willing to take the risk and from the borrowers standpoint whether he sees the need for borrowing. Just a cut in withholding tax rate may not necessarily lend both borrower and the lender to resort to more transaction.
The government has no plan to reduce withholding tax for foreign investors on government bonds as demand for these bonds are strong, a senior finance ministry official said on Thursday.