Tuesday, November 23, 2004

India shoots itself in the foot with new tax

So, does anyone know how much of this is true and what exactly is the Indian government and NASSCOM's stance on this ?

On Sept. 28, India shot its outsourcing market in the foot. On that date, India's finance ministry announced an income tax of more than 36% on foreign firms that have software, R&D, or customer service operations in India. The tax was enacted ostensiblyto discourage foreign-owned service providers, such as EDS and Perot Systems, from establishing wholly owned operations inthe country. Instead, the theory goes, these companies would send offshore outsourcing work to service providers owned bynative Indians in order to avoid the tax.

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Read the complete article here.

Courtesy : Network Fusion

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