
Foreign Investors Protest India’s Tax Regime
In a demonstration of solidarity in economic diplomacy, the ambassadors and high commissioners of seven rich countries have jointly protested against features of, what they term, India’s “retrograde’’ tax regime.
😦
The ambassadors of the US, the Netherlands and Spain, high commissioners of the UK, New Zealand and Australia and the head of the European Commission delegation have expressed their anxiety over the “growing unpredictability in India’s tax policies’’ and written to finance minister Pranab Mukherjee seeking an appointment.
They said India’s policies were creating an “unquantifiable risk in investment planning’’.
The letter has been marked to commerce minister Anand Sharma, deputy chairman of Planning Commission Montek Singh Ahluwalia and cabinet secretary K M Chandrasekhar, among others.
🙂
The concern pertains to the application of punitive tax liabilities on deals with retrospective effect.
Their anxiety was triggered by the $2 billion tax controversy involving Vodafone’s $12 billion buyout of Hong Kong-based Hutchison’s stake in Hutch-Essar.
And now include tax troubles in deals such as
SabMiller’s acquisition of Foster’s Indian beer business,
Aditya Birla Nuvo’s acquisition of shares in Idea Cellular from AT&T Mauritius,
transfer of GECIS Global (Luxembourg) shares by GE to a consortium of US private equity funds and,
Vedanta’s acquisition of Sesa Goa shares held by Mitsui through a UK holding firm.
🙂
In other words, what was until now seen as a problem between tax authorities and Vodafone has now escalated into a standoff between the governments of seven nations, including the US and the EU.
Source : Times Of India 14/10/09
Recent Comments