Suchergebnisse

Tax cooperation seems to be more difficult to achieve through multilateralism than any other economic issue, despite growing consensus about the detrimental effects of corporate tax competition for both market integration and economic inequalities. Repeated attempts to harmonize corporate taxation have gained momentum since the financial crisis, with important proposals made by the OECD and the European Union. Yet failure to implement or even reach agreement on these proposals shows the need for leadership of the G7 in order to address the concerns of those countries that stand to lose most from corporate tax harmonization.

Tax cooperation seems to be more difficult to achieve through multilateralism than any other economic issue, despite growing consensus about the detrimental effects of corporate tax competition for both market integration and economic inequalities. Repeated attempts to harmonize corporate taxation have gained momentum since the financial crisis, with important proposals made by the OECD and the European Union. Yet failure to implement or even reach agreement on these proposals shows the need for leadership of the G7 in order to address the concerns of those countries that stand to lose most from corporate tax harmonization.

On 20th December, 2019, the Central Government introduced the Taxation Laws (Amendment) Ordinance, 2019, which created a favourable taxing environment for the Companies. Through this Ordinance, section 115BAB, which covers all sorts of domestic companies, that is, any company formed and registered in India, was introduced in the Income Tax Act which offered a very low tax rate of 15% (17.5% including surcharge and cess) to the new manufacturing companies. This Ordinance also reduced the Tax rate for domestic companies to 22% (25.17% including surcharge and cess). Additionally under the new corporate assessment strategy, new organizations that set up assembling offices in India beginning in October and initiate creation before the finish of March, 2023 will be charged at a viable pace of 17%. This move did cause a rise in the value of the stock in India, but through this paper, we plan to delve deeper into how this new introduction affected the economy of India – ranging from the stock market to the value of rupees against dollar, the idea behind introducing this Ordinance, while also touching upon what is Corporate Tax and the Corporate Tax system that was present before the introduction of section 115BAB.

Cover -- Contents -- I. Introduction -- II. Prior Studies on CIT Reforms in General Equilibrium Models -- III. On the desirability of (Destination Based) Cash-Flow Taxes: Intuition -- A. Capital Market Distortions -- B. Labor Market Distortions -- C. Export and Import Price Distortions -- IV. Tax Reform Scenarios -- A. Scenario 1: Replacing a CIT by a CFT (No financial Frictions) -- B. Scenario 2: Replacing a CIT by a DBCFT (No financial Frictions) -- C. Scenario 3: All Countries Replacing a CIT by a DBCFT (No financial Frictions) -- D. Scenario 4: Replacing a CIT by a DBCFT (With Financial Frictions) -- V. Conclusions -- VI. References -- I. Appendix: Summary of the Global Integrated Monetary and Fiscal Model -- A. Household Sector -- B. Production Sector -- C. Financial Sector -- D. International Dimensions and Spillovers -- E. Fiscal and Monetary Policy -- F. The Calibration of GIMF