Taxation and Investment in India

Alastair Thomas, Isabelle Joumard, Tibor Hanappi and Michelle Harding
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Michelle Harding: OECD

No 1397, OECD Economics Department Working Papers from OECD Publishing

Abstract: Business taxation in India is characterised by high effective tax rates, a narrow tax base, and an uncertain tax environment for potential investors. However, India has now begun a process of significant business tax reform, including a staged reduction of the corporate income tax rate and removal of a range of business tax concessions. This paper sets the scene for these (and further) reforms by examining the taxation of business income in India with a particular focus on its impact on the investment climate. The paper calculates corporate effective tax rates to highlight the impact of the tax system on investment incentives, investigates the narrowness of the current tax base and the proposed base-broadening reforms, and examines the degree of investor certainty as to the tax rules and their application. This Working Paper relates to the 2017 OECD Economic Survey of India (www.oecd.org/eco/surveys/economic-survey-india.htm)

Keywords: India; investment; taxation (search for similar items in EconPapers)
JEL-codes: H2 (search for similar items in EconPapers)
Date: 2017-06-23
New Economics Papers: this item is included in nep-acc, nep-pbe and nep-pub
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:oec:ecoaaa:1397-en

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