Govt open to talks on US tax plan, seeks support on equalisation levy.
The government is open to engaging in discussions around the minimum global corporate tax being initiated by the United States (US).
While the US initiative is aimed at addressing the threats of tax leakages being posed by tax havens across the globe, the issue of equalisation levy or digital taxes should also be addressed positively, government sources said. Tax experts point out that the new concessional tax of 15 per cent being offered by India for manufacturing companies could be threatened by the proposals, and there is a need for a careful calibration to the new regime. “While taxation is ultimately a sovereign function, and depends upon the needs and circumstances of the nation, the government is open to participate and engage in the emerging discussions globally around the corporate tax structure. The economic division and tax department will look into the pros and cons of the new proposal as and when it comes and the government will take a view thereafter,” a government source said.
In September 2019, the Finance Ministry announced a sharp cut in corporate taxes for domestic companies to 22 per cent and for new domestic manufacturing companies to 15 per cent.