Pillar Two tax regime unlikely soon as India moves with caution

The Union government is expecting to rake in ₹100-200 crore in additional revenue from Pillar Two, only under specific circumstances, a senior finance ministry official said requesting anonymity.

- HARSH KUMAR

It is proceeding cautiously, and is unlikely to implement rules anytime soon, the source said.

Pillar Two, also known as the Global Base Erosion (GloBE) rules, is a global tax system that requires multinational enterprises (MNEs) to pay a minimum tax on their profits in each country where they operate.

The rules are designed to prevent MNEs from shifting profits and to ensure that they pay an appropriate rate of tax.

"An internal analysis indicates that the government is likely to see only an additional revenue of ₹100-200 crore after implementing Pillar Two, and that's only under certain conditions," an official said.

"The gains are not much, and losing the right to make la

ws for such a small amount is a big price to pay," the source added.