Arab Today, arab today india to deliberate tax measures
Last Updated : GMT 06:02:20
Arab Today, arab today
Arab Today, arab today

India to deliberate tax measures

Arab Today, arab today

Arab Today, arab today India to deliberate tax measures

New Delhi - Arabstoday

Whatever its intentions in cracking down on abuse of tax havens, India has alienated overseas investors with the timing and communication of its measures when it can ill afford to do so. India’s move to target tax evaders through a general anti-avoidance rule (GAAR), along with a plan to retroactively tax the indirect transfer of assets, has spooked investors and added to an exodus of funds, battering the rupee. Starting on Monday, India’s parliament will begin considering the finance bill that includes the tax proposals but final details may be a month or more away, government sources have said, which could prolong the uncertainty and aggravate a balance of payments shortfall. “We are hoping that because of the currency and because of inflow problems, they might either delay it by a year or do something else,” said Samir Arora, an India-focused fund manager with Helios Capital Management in Singapore. After days of what traders said was intervention to defend the rupee, the Reserve Bank of India late on Friday took steps to encourage dollar inflows, a move dealers said may do little to improve near-term weakness in the currency, which is approaching an all-time low set in December. Meanwhile, the gloomy mood derailed the year’s biggest initial public offering from India, with auto parts maker Samvardhana Motherson Finance Ltd on Friday scrapping its $311 million issue because of poor demand. Foreign funds are usually the biggest buyers of large Indian equity deals. Adding to investor ire, India said on Friday it may review its tax break treaty with Mauritius, the East African island country that the majority of foreign portfolio inflows are believed to be routed through. Mauritius is the same source of fund flows India is targeting through its GAAR proposal. “Govt going all out to make foreign investors flee India. GAAR is not yet settled and they are making statements on Mauritius treaty review,” tweeted Sandip Sabharwal, head of portfolio management services at Prabhudas Lilladher Group. Battered sentiment The GAAR proposal and a move that would tax already-completed mergers of foreign companies with Indian assets, potentially putting Britain’s Vodafone back on the hook for more than $2 billion in taxes even after India’s Supreme Court ruled in its favour, have slammed investor sentiment. Already, investors had been put off by policy paralysis following a spate of corruption scandals as well as slowing growth, persistent inflation and a fiscal deficit that ballooned to 5.9 percent of gross domestic product in the last fiscal year as the government has been politically unable to cut fuel subsidies. Macquarie’s $1.5 billion Asian Alpha Fund exited its short positions in Indian single stock futures in response to the proposed tax rules, instead using a futures contract in Singapore to get its short exposure to India. The hedge fund also cut its India long exposure in March, joining a number of foreign investors reducing holdings in the country ahead of the expected tax rules. “The Indian government has been making many, many big policy mistakes,” Mark Mobius, executive chairman of Templeton Emerging Markets Group and one of the best-known emerging markets investors, told Reuters on May 1. The rupee is down about 9 percent since the beginning of March, closing at 53.47/48 to the dollar on Friday, putting it close to a record low of 54.30. During March and April, net portfolio outflows from India stood at about $540 million, compared with $13 billion in inflows in January-February. Outflows are painful for a country that imports 80 percent of its oil and has a widening trade gap. Exports rose 21 percent to $303.7 billion for the fiscal year that ended in March, while imports rose 32.2 percent to $488.6 billion. Late last month, Standard & Poor’s cut the outlook for India’s credit rating to negative, putting Asia’s third-largest economy in danger of losing its investment grade status. It said India had reserves to meet about six months of current account payments, down from eight months in 2008 and 2009. Gaar Investors worry that GAAR will give authorities broad latitude to determine tax liability and they want clarity on how it will be enforced. Some expect implementation to be delayed given India’s habit of postponing policy initiatives. A Finance Ministry official who declined to be identified told Reuters there was no plan to defer GAAR. Government sources have also said the tax would not be applied retroactively. In the meantime, some offshore investors have been routing investments to India through Singapore instead of Mauritius. GAAR is intended to close a loophole that allows foreign investors to avoid capital gains tax on short-term investments by routing them through tax havens. Tax authorities could impose a short-term capital gains tax of 15 percent on foreign institutional investors (FIIs) if they are proven to have registered in countries with tax exemptions just to avoid paying Indian taxes. The government has not explained what criteria will be used to determine what qualifies as an impermissible arrangement, prompting investors to complain that it is too vague. “There’s no clarification at the moment, and uncertainty obviously affects the market,” said Taina Erajuuri, who manages the FIM India fund from Helsinki.

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today india to deliberate tax measures Arab Today, arab today india to deliberate tax measures

 



Arab Today, arab today
Arab Today, arab today Mohamed Bahari prepares new collection for spring 2017

GMT 06:15 2017 Monday ,27 February

Mohamed Bahari prepares new collection for spring 2017
Arab Today, arab today 17.4 million tourists visit UAE in 2016

GMT 00:47 2017 Monday ,27 February

17.4 million tourists visit UAE in 2016
Arab Today, arab today Sheds light on major steps in 12-year career

GMT 06:07 2017 Monday ,27 February

Sheds light on major steps in 12-year career
Arab Today, arab today UN envoy sets out framework

GMT 07:25 2017 Monday ,27 February

UN envoy sets out framework
Arab Today, arab today Ayat Abaza says state TV presented major stars

GMT 03:52 2017 Sunday ,26 February

Ayat Abaza says state TV presented major stars
View News in Arabic - Business: اقتصاد دولي
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today Penguins in the age of dinos

GMT 11:44 2017 Saturday ,25 February

Penguins in the age of dinos
Arab Today, arab today Pluto's unruly moons

GMT 06:31 2015 Thursday ,04 June

Pluto's unruly moons
Arab Today, arab today 'Constructive' Vauxhall talk with union

GMT 08:54 2017 Saturday ,25 February

'Constructive' Vauxhall talk with union
Arab Today, arab today Tesla back into red but revenue grows

GMT 07:27 2017 Thursday ,23 February

Tesla back into red but revenue grows
Arab Today, arab today Reasons for the delay 'On the Stairs of Servants'

GMT 06:42 2017 Saturday ,25 February

Reasons for the delay 'On the Stairs of Servants'
Arab Today, arab today Ex-yoga missionary unleashes rage

GMT 12:16 2017 Thursday ,23 February

Ex-yoga missionary unleashes rage

GMT 07:23 2017 Friday ,24 February

Ola Ghanem hopes to work with M.Ramadan

GMT 05:14 2017 Thursday ,23 February

UK appoints 1st Scotland Yard chief in 188 years

GMT 18:23 2017 Friday ,24 February

Fadi explains secrets of  Nancy Ajram's newlook

GMT 10:28 2017 Wednesday ,22 February

Milan laughs while Rome cries

GMT 19:45 2017 Monday ,20 February

Sarah Belamesh designs antiques of "ceramic"

GMT 10:51 2017 Saturday ,25 February

Pigs with edited genes show resistance

GMT 14:04 2017 Friday ,24 February

Messi visit will contribute in tourism

GMT 13:12 2015 Saturday ,09 May

Sheikh Sultan opens Sharjah Centre

GMT 01:04 2017 Tuesday ,28 February

Nokia 3310 is back — and so is 'Snake'

GMT 22:42 2017 Thursday ,23 February

Nasima Gamei revives heritage in jewelries
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday