The digitized economy: a new area of taxation?
Prime Minister Narendra Modi has an overarching vision of a new India (Naya India). The intent is clear - to attract private investments, encourage innovation, embrace new technologies and promote ‘ease of doing business.’ But what will it really take to emerge victorious with the 5 trillion- dollar economy trophy?
Tax rates and ease of tax laws are key aspects in investor decision making, impacting India’s projection as a ‘safe heaven’ and ‘hub’ for investments. Thus, creating a fiscal climate within which businesses can flourish/ thrive will be crucial in making ‘Naya India’ a reality.
But, E-commerce companies already deduct 1 per cent TCS from sellers under the GST Act. The additional tax burden will strike a discordant note which enlists the lack of access to capital and high borrowing costs as its biggest barriers to growth and investments today.
In all, the government policy should focus on the ‘big picture’- creating a conducive commercial environment and building a digital economy which generates jobs by creating / developing new skills and incentives.
With the development of the digital economy and the intervention of big data technology, the digital economy and national taxation will enter a new stage. Probe - Accounting, Auditing and Taxation is an open access journal that provides rapid publication of articles in all areas of accounting, auditing and taxation. The journal's goal is to bridge the gap between academic researchers and practitioners by publishing papers that are relevant to the development of the field of accounting.
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