Retrospective tax law has hurt the country as it scared away the investors, Finance Minister Arun Jaitley today said and stressed on the need for maintaining the standards of fairness in taxation.
Addressing the officer trainees of the Indian Revenue Service, Jaitley said taxes which are realisable have to be collected, but the taxes that are not realisable, should not be collected.
“If you ask me 4-5 years later, in Income Tax Act… did the provisions of the retrospective taxation help India or did they hurt India? My answer is very clear, they hurt India because at the end of the day we have not been able to collect those taxes and we scared investors away,” he said.
He was referring to the retrospective tax law brought in by the previous UPA government.
Jaitley said investors want stability and predictability and they don’t want to hit by a surprise that upsets the business planning and “therefore it is important that standards of fairness in taxation must be maintained.”