Deloitte Says India Has Second Most Complicated Tax System After China
The Indian tax system has been rated as the most complicated in Asia-Pacific region in a survey conducted by consultancy firm Deloitte.
The Asia Pacific Tax Complexity Survey carried out by Deloitte ranked China in first place and India in second in terms of complexity in taxation requirements.
According to the report, the complexity in the tax regime has actually increased in China and India over the past three years. Complexity in this context is the perceived difficulty levels in interpreting tax regulation in the jurisdiction.
The report is based on data collected from more than 300 financial executives and tax specialists covering on their views of the current and expected tax environment of 20 major Asia-Pacific jurisdictions. Around 147 of these entities had business operations in India.
The survey respondents expressed satisfaction with their experience in developed jurisdictions while noting that significant changes were needed in emerging economies for enhancing their predictability and consistency.Consistency refers to uniformity and transparency related to implementation of tax regulations.
Developed markets like Japan and Hong Kong provided investors with a stable market that allowed them to make calculated investments. When markets like India, Indonesia and China were examined, investors felt that the tax regime and market volatility make it difficult for investments. Survey respondents highlighted that consistency in India’s tax regime has also reduced over the last three years.
In a statement Deloitte said
An overwhelming majority of over 90 per cent respondents said that they would like to see tax reform in India along with China and Indonesia. Specifically for India, the survey respondents suggest that they look forward to reform taking place in timeliness and quality of audits and adoption of BEPS recommendations
Deloitte survey respondents also suggested that reforms were required in India regarding the way tax administration was carried out. The survey highlighted that improvement in training for tax officers was one of those areas. The report also noted that the planned rollout of Goods and Services Tax (GST) scheduled from July 1 will be helpful in curbing the current complexity in the country’s tax system. The new tax regime will remove several different taxes levied currently, boosting uniformity in tax regimes across different states.
Other initiatives that might help India improve its tax environment over the next few years will be the adoption of GAAR in April 2017 and of BEPS (Base Erosion and Profit Shifting) in transactions related to M&A tax and indirect tax
As part of the Australian Government’s final report of the independent review of Small Amount Credit Contracts (SACCs), the treasury
The demonetization of high-value currency in India has led to a sharp fall in average forex sales in the country