The World Bank’s findings on ease of doing business contain anomalies and do not truly reflect the reforms undertaken by India so far, especially with respect to taxes, says a commerce and industry ministry official. These issues were flagged at a meeting with a visiting World Bank team here. In its ‘Doing Business’ 2017 report, the World Bank ranks countries on 10 parameters including paying taxes, starting business and trading across borders. On ‘paying taxes’ indicator, India was placed quite low at 172nd position out of 190 nations.
The official added that the report has failed to take into account the innumerable initiatives India has taken to boost investors’ confidence under ‘Make in India’ campaign. It was brought to the notice of the team that the sample size in case of India was dramatically high compared to other developing nations, with similar population size. Moreover, it was observed that the findings did not reflect the true picture of reforms undertaken, particularly in tax rates and administration. It was also pointed out that the findings are overstated with regard to time taken in complying with taxation laws and filing returns.
The observation that revision of corporate income tax return takes 54 hours and also triggers an audit was a misstatement, the official said clarifying that the revision of the corporate income tax return is an online process and does not automatically trigger audit. Similarly, observations with regard to payment of VAT (value added tax) and refund mechanisms are not in sync with the ground reality.
The World Bank’s team, which is currently in Mumbai, will again meet with senior officers of the ministry on July 10-11 here. The team’s visit assumes significance as the next report is scheduled to be released in October this year. India, which was at 130th rank in the ease of doing business index, has been taking steps to improve the business climate with view to find a place among the top 50 nations.