New Delhi, Jan 2 (IANS) Finance Minister Arun Jaitley on Saturday reiterated that retrospective taxation scares away both domestic and international investors who propose to invest in the country.
“If you ask me four-five years later regarding the Income Tax Act’s provision for retrospective tax, whether it helped or hurt India, my answer is very clear: They hurt India,” the minister said while addressing trainee officer of the Indian Revenue Service here.
“At the end of the day, we were not able to collect those taxes and we scared the investors away. Investors want stability, they want predictability. This applies to both domestic and international investors. When they put in their money, they want to know how much tax they will be charged. They don’t want to invest in a jurisdiction where there is uncertainty,” Jaitley added.
“Therefore, we have now created these institutions of advanced ruling and so on… so that before they put in the first rupee, they want to know how much tax they have to pay. They don’t want to be subsequently hit by a surprise as that hits business planning,” he said.
Jaitley said that maintenance of standards of fairness in taxation was also important.
“If we lean either way, we may unfairly lose revenue or may unfairly tax an assessee. Unfairness either way has to be avoided,” the finance minister said.