Bold Tax Move Needs Matching Reforms
The Hindu Business Line|September 23, 2019
Policy consistency and other enabling supply-side measures can build on corporate tax breaks
VENKY VEMBU
Bold Tax Move Needs Matching Reforms

In the first flush of over-the-top corporate and stock-market euphoria following the dramatic announcement on Friday of sweeping cuts in corporate taxes, it is easy to forget that barely a month earlier, Finance Minister Nirmala Sitharaman had, in effect, been arguing against herself. A 25 percent tax rate for all corporates, she had said as recently as in early August, must await a time when there was “revenue buoyancy”.

Her articulation of such a dampening sentiment — that the government would be unable anytime soon to deliver on its promise of lower corporate taxes — had done such a masterly job of ‘expectation management’ that heads of industry had reconciled themselves to the inevitability of high taxes and been reduced to petitioning her for lowly tweaks of GST rates.

But even the government’s steady dribble of ‘stimulus’ measures in recent weeks had proved largely ineffectual in arresting the downward spiral of business sentiment. In fact, a certain surliness of spirit had begun creeping into industry-government interface, with one outspoken corporate titan even suggesting — erroneously — that Sitharaman was perhaps holding forth on matters beyond her Ministry’s ken.

Which is when, in the proximate context of Prime Minister Narendra Modi’s high-profile visit to the US, the government went ‘all in’ with the dramatic announcement of corporate tax cuts, bringing them down to levels that are competitive with other jurisdictions.

There is never a bad time to do the right thing, of course. And consistency of outlook is sometimes an overrated virtue, particularly if that original outlook placed a premium on heavyhanded tax extraction.

Denne historien er fra September 23, 2019-utgaven av The Hindu Business Line.

Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.

Denne historien er fra September 23, 2019-utgaven av The Hindu Business Line.

Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.

FLERE HISTORIER FRA THE HINDU BUSINESS LINESe alt
Covid Presents An Opportunity For India
The Hindu Business Line

Covid Presents An Opportunity For India

India must attract investors exiting China post-Covid. Streamlining of project clearances and relaxation in FRBM norms will help

time-read
4 mins  |
April 29, 2020
Did Alternative Assets Shield You From Covid-19 Volatility?
The Hindu Business Line

Did Alternative Assets Shield You From Covid-19 Volatility?

The assets closely linked to stock and debt markets could not stave off the losses

time-read
4 mins  |
April 29, 2020
How To Put Aircraft To Bed
The Hindu Business Line

How To Put Aircraft To Bed

Preserving grounded planes, to get them up and flying at short notice, is a challenging task. Ashwini Phadnis captures the process

time-read
5 mins  |
April 29, 2020
There Can Be No Going Back On WFH
The Hindu Business Line

There Can Be No Going Back On WFH

Covid-19 has fast-forwarded the shift to ‘work from home’. However, some face-to-face connect will always be needed

time-read
5 mins  |
April 29, 2020
UN, WHO Urged To Ensure ‘Benefit Sharing' Of Covid-Related Data
The Hindu Business Line

UN, WHO Urged To Ensure ‘Benefit Sharing' Of Covid-Related Data

Biopharma firms should reach vaccines, medicines to poor nations at an affordable price, say civil society bodies

time-read
2 mins  |
April 29, 2020
With No Clear Signal From Rlys, States Explore Ways To Bring Back Migrants
The Hindu Business Line

With No Clear Signal From Rlys, States Explore Ways To Bring Back Migrants

Quarantine centres, cross-country buses being arranged even as migrants hop on to boats, trucks and ambulances

time-read
2 mins  |
April 28, 2020
Centre Allows All Neighbourhood Shops To Open But With Riders
The Hindu Business Line

Centre Allows All Neighbourhood Shops To Open But With Riders

Final call will be taken by local authorities; shopping complexes that draw fewer ‘outsiders’ are permitted to operate

time-read
2 mins  |
April 28, 2020
Covid Impact Relatively Muted In India
The Hindu Business Line

Covid Impact Relatively Muted In India

Compared to Italy and the US, India’s rate of infection spread has been slow. This can be attributed to the strict measures in place

time-read
4 mins  |
April 28, 2020
How Global Trade Will Fare Post-Covid
The Hindu Business Line

How Global Trade Will Fare Post-Covid

China isn’t likely to lose its pre-eminent position soon. India, for one, will need to make manufacturing globally competitive

time-read
4 mins  |
April 28, 2020
How To Curb Harassment In The Virtual Office
The Hindu Business Line

How To Curb Harassment In The Virtual Office

Training and sensitisation are essential. Institute a strict dress code and chat etiquette to ensure professionalism during video calls

time-read
3 mins  |
April 28, 2020