Muristek
Budget 2022: US companies look at tax parity, transparency, predictability
Washington, February 1
American companies having a foothold in India and those planning to expand their business in the fastest growing economy of the world expect "tax parity" in the annual budget to be tabled by Union Finance Minister Nirmala Sitharaman, the head of a top India-centric US business advocacy group said.
Mukesh Aghi, president, US India Strategic and Partnership Forum (USISPF), said the American companies have high expectations from what Sitharaman would present in her fourth annual budget on Tuesday. The US companies, he noted, are very keen on investing in India as they believe that the fundamentals of the economy remain strong in the country, offer a big market and they would like to diversify given the Chinese risk factor.
"They (US companies) are looking at tax parity. For example, e-commerce companies that have equalisation levy, that needs to be done away with. They are looking at lowering of tariffs. It is good for India also because domestic companies become much more competitive and efficient," he told PTI in an interview on Monday.
American companies, Aghi said, are looking at more investment in India's infrastructure. They also want the labour laws and land acquisition process streamlined, he observed.
"Because ease-of-doing business is still very critical in the minds of these investors. They spent a lot of time putting in an application for more land or water so that has to be sorted out," he said.
The USISPF chief further said the US companies, from a long-term perspective, expect from the annual budget "a sense of predictability, transparency and concentrated process". These are the critical questions raised inside a boardroom when a company is planning to invest millions or billions in India, he added.
"I think it is important that the tax regime, for example, do not behave like tax terrorism, but behave more like tax partners. If you look at any US company at the moment, there will be some kind of tax issues with the authorities," he said in response to a question.
Aghi added that it is important that corporate taxes are in line from a global perspective. They do not have extra taxes, which makes these companies' cost of manufacturing itself more expensive, he said.