Taxation policy has to be non-adversarial: Arun Jaitley

New Delhi/London, April 27

Promising a business friendly environment to woo foreign investments, Finance Minister Arun Jaitley today made it clear that retrospective tax will not be imposed and that taxation policy has to be "non-adversarial".

"Our Taxation process has to be simpler to increase tax buoyancy. Our taxation policy has to be non-adversarial. The government does not intend to tax people retrospectively," Jaitley said.

He said that the corporate tax structure has to be globally competitive and that is why the government has proposed to reduce it from 30 to 25 per cent in this year's Budget.

"Decision-making has to be much quicker. The process of political consensus has to be statesman-like and mature," he said addressing D P Kohli Memorial Lecture here.

The Finance Minister said that agriculture as well as infrastructure sectors face serious challenges due to lack of investment.

"Highways programme has slowed down and investment has not come in railways. We have to invest Rs 70,000 crore in infrastructure sector and that is why we have to little delay the fiscal road map," Jaitley said.

Meanwhile, he said there is a need to revisit certain provisions of the Prevention of Corruption Act, 1988.

"We need to revisit provisions of Prevention of Corruption," he said, while noting that the concerned departments and civil servants were reluctant to take decisions.

Phrases like "corrupt means", "public interest" and "pecuniary advantages" have to be redefined in the present context to differentiate between the act of corruption and honest error, Jaitley said.

Govt mulling high-level panel on tax issues

India plans to set up a high-level committee to sort out taxation issues of the past and make the system predictable, Finance Minister Arun Jaitley has said, while seeking to contain the adverse fallout of revenue department’s move to levy MAT on foreign investors.

“Even though it is only the legacy issues (concerning taxation) that haunt us, we recognise that we must put a quick end to them.

“I am considering a high-level committee to explore what can be done to resolve the past and move beyond it in a way that would provide real predictability and certainty to investors,” he wrote in an opinion piece in Financial Times.

“This committee will be instructed to report back expeditiously so that early actions can be taken. We have fashioned tax policies for the 21^st century. Our tax administration cannot afford to lag behind. We will not let it,” Jaitley said.

The disputes that are now attracting attention are legacy cases, which are tax demands arising from actions that the tax authorities and the judiciary took before NDA government came to power.

Explaining the levy of MAT on foreign portfolio investors, Jaitley said the decision was taken not by the government, but by quasi-judicial bodies, which were created well before the present government came to power to reassure investors that the tax system would be free of political interference. — PTI