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'Indian firms see tax laws to be unrealistic for M&A '- PWC study
Friday, 19 September 2008, 16:28 IST
New Delhi: Indian firms do not find the design of the country's taxation system to be appropriate for the mergers and acquisitions (M&A). Infact, 90 percent of the firms do not regard it to be neutral and conducive to group restructuring, reveals a study by PricewaterhouseCoopers.
The study conducted on more than 70 companies asserts that the current M&A tax policies do not buoy up the objectives like raising fund, streamlining business structures and global consolidation. This dissatisfaction creates a humdrum between the companies and the tax officers. The counter productive fiscal framework adds on to the existing woes of the firms like transfer pricing and creates the most challenging environment. Both direct and indirect tax are felt to be arduous that hampers the progress of the firms, with 75 percent responding against the former and 54 percent against the latter. Infact, according to Budget 2008-09, indirect tax collections are estimated at Rs 3,21,264 crore during the current fiscal, while direct tax collection target has been revised from Rs 3.65 lakh crore to about four lakh crore rupees. It is this huge amounts collected under the name of tax makes them crave for new codes that shall introduce a taxation system which will be cost-effective and beneficial.
Infact, the firms have jotted down a wish list on their expectations from the upcoming income tax code. It includes 87 percent expecting a simplification of tax laws and 60 percent wishing for lesser discretionary powers to tax officers. Another, 53 percent have shown their interest in having a code that shall provide the laws in a detailed way with suitable clarifications.
Source: IANS
Source: IANS
