Unpredictable tax rulings biggest challenge: PWC
Corporates consider unpredictable rulings by authorities as the biggest challenge facing the tax administration in the country.
By PTI |
NEW DELHI: Corporates consider unpredictable rulings by authorities as the biggest challenge facing the tax administration in the country, even as they devote more time and attention to deal with issues concerning income tax.
"Corporates, especially MNCs, believe that unpredictable rulings by tax administration are the most important reasons leading to Tax Risk challenges, while lack of clarity in tax laws is a major concern for Indian firms", said a survey on "Tax Risks in India" conducted by global taxation consultancy firm PriceWaterhouseCoopers (PWC).
Conflicting judicial positions and frequent changes in tax laws were other areas of concern, PWC Executive Director Ketan Dalal said while releasing the survey.
The country, he said, needs to restructure tax administration and improve dispute resolution mechanism, in the absence of which litigations take on an average 12-15 years to settle.
Among various taxes, income tax remained on top of corporate agenda because of its direct impact on the bottomline of a company, he said.
The other important tax which occupied the attention of the corporates was service tax, which is a relatively new tax for the companies as well as for the administration, he said.
Corporates perceived image dent on account of non-compliance as more damaging than loss of investors' confidence or financial penalties in the event of a default.
The MNCs, Dalal said, conceive transfer pricing taxation as the most important area of potential risk, while the IT/ITeS firms perceive mergers and acquisitions as significant risk areas.
"Corporates, especially MNCs, believe that unpredictable rulings by tax administration are the most important reasons leading to Tax Risk challenges, while lack of clarity in tax laws is a major concern for Indian firms", said a survey on "Tax Risks in India" conducted by global taxation consultancy firm PriceWaterhouseCoopers (PWC).
Conflicting judicial positions and frequent changes in tax laws were other areas of concern, PWC Executive Director Ketan Dalal said while releasing the survey.
The country, he said, needs to restructure tax administration and improve dispute resolution mechanism, in the absence of which litigations take on an average 12-15 years to settle.
Among various taxes, income tax remained on top of corporate agenda because of its direct impact on the bottomline of a company, he said.
The other important tax which occupied the attention of the corporates was service tax, which is a relatively new tax for the companies as well as for the administration, he said.
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Corporates perceived image dent on account of non-compliance as more damaging than loss of investors' confidence or financial penalties in the event of a default.
The MNCs, Dalal said, conceive transfer pricing taxation as the most important area of potential risk, while the IT/ITeS firms perceive mergers and acquisitions as significant risk areas.
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