Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.
This is an entirely free service. No payments are to be made.
Infosys favours taxing infotech exports - Views on News from Equitymaster
The Infosys managing director Nandan Nilekani has said that its time for the infotech industry to pay its dues. This has been reported by a leading financial daily.
Although this has been opposed by the industry body Nasscom, the fact remains that a tax on software exports would not only bring in revenue for the government but also possibly stop the use of hawala transactions being undertaken in the guise of software exports. Or at least bring them under the tax net!
Despite claims of high taxation on corporate India, the fact is that Indian companies are among the lowest income tax payers in the world. Although there are many companies who pay around 35% tax, the average rate of tax that most of the Top 200 companies in India pay is around 20%.
In the USA, the average rate of tax is around 25–30% and in South–East Asia it is around 30%.
The opposite view is that since software exports are expected to touch $ 87 bn by 2007, the encouragement to the sector by way of tax benefits should continue since the growth in the foreign exchange reserves more than makes up for the loss of tax revenue.
A via media would be to bring the software companies under the tax net by imposing a tax initially of around of 5%–10% and gradually doing away with the tax benefit within (say) three years.
Equitymaster requests your view! Post a comment on "Infosys favours taxing infotech exports". Click here!
Thank you for posting your view on Equitymaster!
Comments are moderated by Equitymaster, in accordance with the Terms of Use, and may not appear on this article until they have been reviewed and deemed appropriate for posting.
In the meantime, you may want to share this article with your friends!
LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.
SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.
Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India. Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407
Equitymaster requests your view! Post a comment on "Infosys favours taxing infotech exports". Click here!
Comments are moderated by Equitymaster, in accordance with the Terms of Use, and may not appear
on this article until they have been reviewed and deemed appropriate for posting.
In the meantime, you may want to share this article with your friends!