Unsustainable tax demands will put off investors: Jaitley
New Delhi: Union Finance Minister Arun Jaitley has said unsustainable tax demands would not lead to more collections but would only earn the country a bad name as an investment destination.
"Unsustainable demand won't get you taxes. Unsustainable demands in the books can show you in good glory, but eventually those taxes will be blocked in some judicial court proceedings. They would have only earned us a bad name as an investment destination," he said yesterday addressing the Hindustan Times Leadership Summit here.
Regarding the retrospective amendments to the tax laws by the previous UPA government leading to a tax dispute with British telecom major Vodafone, Jaitley said that if such laws are not investor friendly companies would start looking elsewhere.
Earlier this week, the Mumbai High Court ruled against the income-tax department whereby it lost its Rs.18,000-crore transfer-pricing cases against the Indian arm of oil major Shell.
The Finance Minister further said that making the taxation regime investor friendly and streamlining the procedure for land acquisition are the major challenges facing the government.
"Undoing a lot of taxation decisions is quite challenging, but that necessarily does not involve legislative action. Only some areas require action," he said.
While there were no issues on the compensation part of the land acquisition law, its procedural parts require a relook, Jaitley said.
"I'm in favour of higher compensation to farmers. But the principle of "eminent domain" means that the state will need land for infrastructure, other national purposes. The procedural part of the land law is a big problem," he said.