With India's GDP & Per capita Income showing an
upward trend, tax transparency is a mandate to achieve sustainable growth by
reaping benefits of the expanding economy.
Adoption of Voluntary Tax
Transparency framework:
1. The framework should incentivise
private companies, PSUs and MNCs operating in India to disclose their
strategies and approaches towards domestic & international taxation.
2. This shall attract international
investors who prioritize transparency, responsible tax behaviour over huge
profits, particularly in Infrastructure and green energy projects.
3. The investment shall create job
opportunities & help in economic expansion leading to overall prosperity of
the country.
4. It fosters healthy competition among
organizations to improve their scores in not only financial but also in ESG
framework.
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ESG
(Environment, Social & Governance Framework): ● SEBI mandated
ESG disclosures for top 1000 listed companies (by market capitalization) to
make ESG disclosures as per the BRSR (Business Responsibility and
Sustainability Reporting). ● The BRSR Core elements includes,
● The ESG
framework based on BRSR enhances the reliability of ESG disclosures by top
listed companies. |
5. The ESG Framework shall help in
achievement of Sustainable Development Goals.
a. Voluntary transparent disclosure of
an organisation's tax on Carbon emissions, waste management, water consumption
and plastic wastes shall motivate companies to adopt green practices.
b. Voluntary disclosure of a company's
contribution to social insurance, healthcare, pension premium and governance
disclosures shall ensure robust corporate governance, accountability and
transparency.
Way forward:
1. India should adopt a Tax transparency framework to motivate organizations to voluntarily adopt them, without affecting the Ease of Doing Business.
2. The Tax transparency framework in India shall be framed on the lines of TTR (Tax Transparency Report), an annual voluntary report on information of companies' global tax strategies.
