India needs a stable tax regime, not a tax haven: FM

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SME Times News Bureau | 06 Apr, 2015
Finance Minister Arun Jaitley on Monday said India will not be allowed to become a tax haven and that the government would provide a reasonable window of compliance to those who have stashed away ill-gotten money overseas to come clean.

"India needs a stable tax regime, not a tax haven... The taxes that are due must be paid," the finance minister said at the annual session of the Confederation of Indian Industry (CII) in New Delhi, adding: "A reasonable compliance rule would come."

Elaborating on this, he clarified that while pursuing tax-related cases, the fairness of the Government has been partly misunderstood and stressed that while India does not practice tax terrorism, it is not a tax haven either.

The aim of the Government, he said, is to create a conducive business environment by addressing the challenges faced, especially with respect to taxation, the Land Acquisition and Rehabilitation and Resettlement bill, and corruption.

Reflecting on the last ten months, Jaitley said, that in order to address the most important challenge of restoring India's credibility, the Government decided to open up the economy even further and raised the FDI limit across several sectors. However, while that would enable investments, it was critically important to create a conducive business environment, with a special focus on ease of doing business.

To facilitate ease of doing business, the Government is focusing on tax reforms with the aim of pushing for the implementation of the Goods and Services Tax (GST) and lowering the corporate tax rate.

With respect to the land law, which is commonly perceived as anti-farmer and detrimental to the cause of rural India, the Minister said the Government was cognizant of the large population that would get impacted, but was also aware of the potential of this to unleash productivity and employment. Amendments in the Land Acquisition and Rehabilitation and Resettlement bill are required to support building of rural infrastructure including roads, irrigation and industrial corridors.

Speaking on the issue of corruption, the Minister said that it was imperative to distinguish between a corrupt act and an honest mistake in order to support fair and fearless decision making.

The road map, he stressed, is very clear and the Government will do its share by creating a policy framework that enables economic growth. The time now, he said, is to slog to implement the changes at the ground level, and the Minister sought the industry's support in implementing these changes.

Earlier, in his opening address, Ajay S Shriram, President, CII said that industry appreciates the steps taken by the Government to open up the economy and facilitate economic growth, and said CII has decided to redouble its efforts to build India in partnership with the Government.

He highlighted measures taken by CII to boost economic growth, notably mentioning the launch of the CII Make in India Task Force, a new Centre of Excellence focused on entrepreneurship in Chennai, making it the 10th Centre of Excellence for CII. He also mentioned the launch of the CII Start Up Centre, a network of incubation of Centres managed by professionals and financed through fund managers, and Mission Sanitation for Schools under the Swachh Bharat campaign, in which CII has pledged to build 10,000 school toilets across the country in partnership with corporate leaders.

In his closing remarks, Dr Naushad Forbes, Vice President, CII and Director, Forbes Marshall Pvt Ltd, thanked the Minister and said that focus on growth and development has been integral to CII throughout its history of 120 years, and that CII looks forward to partnering the Government to build India.

The Minister also gave away the CII Foundation Woman Exemplar Awards to Pravasini Bangari for her contributions in making health care and nutrition services accessible to the most vulnerable persons in her community in her village in Balangir District, Odisha, and Ms P Thayammal for her contributions in the field of education in her village in Thoothukudi district, Tamil Nadu.

The CII Foundation Woman Examplar Awards were instituted in 2005 and its scope expanded in 2014 into a programme, which was brought under the aegis of CII Foundation. The initiative is now named the CII Foundation Woman Exemplar Programme and promotes women's empowerment at the community level by discovering, recognizing and supporting those who have, against all odds, excelled and contributed significantly to the development process in India.