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April 2, 2012
India’s Retroactive Tax Proposal Assailed by Business
Faced with an Indian proposal to retroactively tax mergers and acquisitions as far back as a half-century, USCIB joined with other top business groups from North America, Europe and Japan in a letter to Indian Prime Minister Manmohan Singh
protesting the move.
The proposal, contained in India’s 2012 finance bill, could upend numerous previously decided, could have a major dampening effect on foreign investment in the country. In their letter, the business groups wrote: “The sudden and unprecedented move in the Bill has undermined confidence in the policies of the Government of India toward foreign investment and taxation and has called into question the very rule of law, due process, and fair treatment in India. This is now prompting a widespread reconsideration of the costs and benefits of investing in India.”
The letter was timed to coincide with the visit to India by U.K. Chancellor of the Exchequer George Osborne, who was expected to raise the issue with his Indian hosts. In addition to USCIB, the letter was signed by the Business Roundtable, Canadian Manufacturers & Exporters, Capital Markets Tax Committee of Asia, the Confederation of British Industry, the Japan Foreign Trade Council and the National Foreign Trade Council.
Staff contact: Carol Doran Klein
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