Economy Aug 7, 2012
Attacking Finance Minister P Chidambaram on his proposals on tax regime, CPI(M) today claimed that the measures would facilitate tax avoidance by multinationals and corporates.
"The measures announced are meant to help multinational companies' non-payment of tax on assets they acquire in India and to facilitate tax avoidance by foreign and Indian corporates," the CPI(M) Politburo said in a statement.
It said in his first statement after assuming office, the Finance Minister has set out a neo-liberal package of measures which seeks to "reverse the decisions taken by Parliament and his own government."
"Reversing this measure means helping Vodafone to avoid paying a tax claim of Rs 12,000 crore on acquisitions in India," the CPI(M) claimed.
Chidambaram has "made his intention clear to reverse the retrospective effect in the tax law," the Left party said, adding that this retrospective provision was made in the Finance Bill adopted by Parliament and "no change can now be made without Parliament's approval".
Referring to Chidambaram's announcement to review General Anti Avoidance Rules (GAAR), it said GAAR was meant to "plug the loopholes which enable tax avoidance by companies using the Mauritius route."
The party demanded that the government implement the retrospective provision in the law and work out effective rules under GAAR.
"It is obnoxious to argue that in order to regain 'investor confidence', tax laws should be so amended as to violate principles of national justice in order to provide avenues for profit maximization at the expense of public revenue," CPI(M) said.
At a press conference yesterday, Chidambaram had promised fine-tuning of policies and measures to put in place a stable and non-adversarial tax regime and a possible cut in interest rates.
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