Please, trust us: Finance ministry to foreign investors

Shruti Srivastava Posted online: Wednesday, Nov 20, 2013 at 0000 hrs
New Delhi : In a bid to assuage apprehensions of foreign investors and restore their confidence, the finance ministry on Wednesday urged investors and taxpayers to keep their faith in the tax system.

''The concept of pro-revenue approach among tax officials is undergoing a change. Spirit of change is permeating through tax administration. We are bringing in more IT-based reforms. We want to tell people please, trust us,'' Sumit Bose, revenue secretary, said at a tax summit organised by CII here.

He added that the government has taken a slew of measures, including tax administration reforms commission (TARC) to bring in changes in the tax regime while at the same time also move towards global best practices in taxation. The introduction of advance pricing agreements and safe harbour rules are steps towards reducing litigation between taxpayers and the department.

However, Bose said, while the government is taking steps to facilitate investments in the country, there is a rising concerns among the tax authorities about base erosion and profit shifting by multinationals, not just in India but across the world. He urged tax payers to pay their dues so that government can optimise revenues for its operation.

The tax department has been facing heavy criticism following its move last year to introduce retrospective amendments to tax companies, including Vodafone. As a fallout of the amendments, the country witnesses a dip in foreign investment and huge FII outflows. Later, a committee was constituted by Prime Minister Manmohan Singh to look into the contentious issues, including the general anti-avoidance rules (GAAR).