MFA Submits Joint Letter on Concerns with India’s Finance Bill

April 17, 2012

From: MFA, Financial Executives International, Financial Services Forum, Information Technology Industry Council, Investment Company Institute, National Foreign Trade Council, Securities Industry and Financial Markets Association, Software Finance & Tax Executives Council, TechAmerica, U.S. Chamber of Commerce, United States Council for International Business, U.S.-India Business Council

To:

Timothy Geithner, Department of the Treasury
John Bryson, Ron Kirk, Hillary Clinton

MFA, together with a number of other trade associations, today submitted a letter to Secretary of the Treasury Timothy Geithner that outlines serious concerns with proposed tax provisions in India’s Union Budget Finance Bill 2012 and strongly encourages Secretary Geithner to address these concerns with Indian leadership. The letter notes that if enacted, the proposals will have a significant negative effect on member companies operating in India, their customers and shareholders, and investment in India. Specifically, provisions such as an unprecedented period of retroactive tax collection, a broad and unclear general anti-abuse rule (GAAR) and an onerous tax on indirect stock transfer, are inconsistent with international tax policy and standards, and result in significant erosion of the rule of law. The letter notes that, A predictable, transparent and internationally consistent tax regime is imperative for companies operating in India, and is a critical component of attracting long term investment. We believe that the implementation of these provisions will have immediate and severe consequences for companies affecting the willingness of companies to commence or continue their operations in India. MFA plans to submit a letter to the Indian Finance Ministry raising these concerns.

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