(Edited Image Courtesy: OECD)

 

The Organization for Economic Cooperation and Development (OECD) & certain similar entities want to market globalization with a human face. They want to do this by changing capitalism with socialism as the front engine of globalization train.

They want to tax more rich persons and companies in varied ways. For them, progressivity of taxation is the need of hour. This proposal has been mooted with the belief that globalization has led to reduced progressivity of taxation at the top end & created inequalities. 

The trade-off between high rates of taxes and tax evasion is no longer the issue for global policy makers. Nor is the impact of high taxes on capital investment and jobs creation.

“Re-design our tax systems to reduce inequality and promote inclusive growth,” says OECD Policy Brief captioned ‘Time to Act: Making Inclusive Growth Happen’ released on the eve of two-day OECD Ministerial Council Meeting (MCM) that concluded on 8th June. 

It says: “Progressive taxation is a key pillar of redistributive fiscal policy and has an important role to play in mitigating the advantages bestowed by inherited wealth and assets. The design of tax incentives also has important implications for how our economies grow and how the proceeds of that growth are shared out”.

 (Image Courtesy: vodafone.in)

 

“Retrospective tax is a matter of past. That chapter will not be opened again. We are ensuring that neither this government nor the future governments can open this chapter” stated Prime Minister Narendra Modi during January 2016.

What Mr. Modi did not disclose is that Government reserved the right to complicate and lengthen the retrospective taxation cases initiated by the UPA Government. 

The NDA Government perhaps knows that it would ultimately be unable to get even a single pie through due process of law. This is because international arbitrators are unlikely to rationalize retrospective taxation, which is akin to back-stabbing businesses.  

Hence muddling up retrospective taxation, for which the blame, in case, lies with the UPA.  

This right to mess-up and drag the cases is being exercised with great zeal in the case of Vodafone Group Plc (VGP). 

Capital gain tax (CGT) is paid by an entity that sells equity shares/property at a price higher (premium) than the purchase price. Modi Government wants to collect the same CGT from both buyer (VGP) and seller of shares (Hutchison Telecommunications International Limited (HTIL). It is thus redefining taxation! 

Simultaneously, it is dragging and complicating the two-front arbitration started by VGP for settlement of CGT of Rs.112.79 billion. 

 (Edited Image Courtesy Transparency International's Guide on UNCAC)

 

 

“India is now rising on the world stage: PM Modi”, claims the headline to PM’s speech posted on narendramodi.in on 7th March 2017. Well, world-stage is multi-dimensional. And one dimension in which India has missed the stage is the one about which Mr. Modi is most vocal! Yes, you guessed it right- fighting corruption.

Modi Government has preferred to keep India as a super-laggard when it comes to implementing United Nations Convention Against Corruption (UNCAC) and making disclosures about its compliance. UNCAC is the only globally accepted framework for battle against corruption. 

Missing from website of UNCAC’s secretariat, United Nation’s Office on Drugs and Crime (UNODC), are three essential components of India's anti-corruption profile. The three components are: Country’s self-assessment report/checklist (SAR), country review report (CRR) prepared by two UNODC-nominated countries and executive summary (ES) of each CRR.

India is one of the very few ratifying countries whose all three vital elements are missing from their respective anti-corruption profiles.