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Digital taxation needs to be simple and inclusive, says Nirmala Sitharaman

Digital taxation needs to be simple and inclusive, says Nirmala Sitharaman

Amid the on-going row over digital taxation, Finance Minister Nirmala Sitharaman on Saturday said that a consensus-based solution on the issue should be simple and inclusive based on a robust economic impact assessment. The minister was speaking at the 3rd G20 Finance Ministers and Central Bank Governors (FMCBG) meeting held at Riyadh (Saudi Arabia) through video conferencing.
Referring to the issues concerning international taxation and challenges related to digital taxation, Sitharaman said, “It is imperative that this consensus-based solution should be simple, inclusive and based on a robust economic impact assessment.”

Recently India defended the 2 per cent equalisation levy on non-resident e-commerce companies, saying it is non-discriminatory in nature and its purpose is to tax businesses that have a close nexus with the country’s market through their digital operations.
In a six-page written submission to the United States Trade Representative (USTR), India said the levy is applicable only for companies with annual revenues in excess of Rs 20 million (about USD 267,000), which is a low threshold aimed at exempting very small e-commerce operators globally.

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