London: Seeking to soothe the sentiments of foreign investors, disturbed by fresh claims of tax on past transactions by Indian authorities, Finance Minister Arun Jaitley has said the government is rationalising the country's tax system.
"We are trying to rationalise taxes - that is, lower taxes and introduce a non-adversarial and fair system" the finance minister told an event co-hosted over the weekend by the Federation of Indian Chambers of Commerce and Industry and UK-India Business Council.
"We need a lot of investment in India. We need to ease the process of doing business. Therefore, slowly we are introducing changes in that direction," he said, adding a fair and equitable tax system was a top priority.
The finance minister's comments came against the backdrop of the tax authorities slapping a $3.2-billion capital gains tax on Cairn India, a part of the Vedanta Group, for a transaction that took place some 10 years ago.
This tax, which was not explicitly in existence at that time, was introduced in 2012 with retrospective effect and has been a cause for much concern among foreign investors. Such retrospective tax is against the present government's stated policy.
Britain-based Vodafone faces a similar dilemma and so do some 30-odd companies. But the finance minister, while not raising the issue directly during his various addresses, only stated what he has been maintaining in the past.
"We are correcting the aberrations in the taxation structure," said the finance minister, who is on a two-day visit here on his way back to India from the US.
"Our roadmap is very clear," he said, referring to the policies being pursued by the Narendra Modi government. He also made specific reference to PM Modi's Make in India initiative.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
