View: A case for a minimum alternative tax on revenues, not on profits - ET Retail
The right alternative is to tax revenues, not profits. A tax on revenue will apply even to loss-making companies.
- She has done exactly that in an op-ed in the Financial Times (‘An overhaul of the international tax system can wait no longer’, goo.gl/XanF8z).
- The public perception that large multinational companies pay little tax has led to political demands for urgent action… with good reason.
- IMF analysis shows that non-OECD countries collectively lose about $200 bn in revenue a year, or about 1.3 per cent of gross domestic product , due to companies shifting profits to low-tax locations.
- That makes it economic for private equity to provide billions for ventures — mostly digital/electronic ventures — that lose money for years while building market share by cutting prices below cost.
- Indian businesses call this ‘capital dumping’, using subsidised capital to gain market share at the expense of Indian rivals.