|Arun Jaitley was
also in the Global Tax 50
After 17 years of discussions on a GST, Jaitley was the one
who led the final campaign to introduce the new structure that
harmonised an array of different indirect taxes across the
country's 29 states. There is no other structure worldwide that
can compare to this regime. Even the closest comparatives
across the EU and the GCC are dwarfed by it.
Although there have been bumps in the road over how and when
to implement the GST regime, Jaitley has been a key figure in
mediating between conflicting interests and opinions, as well
as communicating and championing the change to the media and
Tax professionals have described the new GST regime as a
"paradigm shift from the previous indirect tax reform in India"
and a "game-changer for the Indian economy", transforming the
whole country into a single commercial market.
Although the GST regime has been implemented, the finance
minister is still committed to the initiative. Through the GST
Council, which he chairs, Jaitley is adapting the tax system to
address initial glitches and complaints. This is a task that
will continue in the coming year and it is likely to be
influenced by inevitable disputes over GST compliance.
But the finance minister's work has not been isolated to the
GST regime in the past year. When he was first appointed as
finance minister, Jaitley told International Tax
Review that his priorities for business were to reduce
compliance costs (including litigation) and increase tax
certainty. This mission was evident in the 2017 annual budget
and in the subsequent legislative changes.
In what could be described as a mature and balanced budget,
Jaitley promised to clean up India's economy in an effort to
boost revenue through better compliance measures, rather than
through tax hikes. Among others changes, administrative burdens
on foreign portfolio investments (FPIs) were reduced, companies
were given a longer period to carry forward minimum alternative
tax (MAT) credits, and a series of tax measures were unveiled
to boost the "Make in India" initiative, which included tax
benefits for the manufacturing sector.
Elsewhere, under Jaitley's leadership, the finance ministry
and tax authorities have been working to tackle corruption and
the black economy, and to boost tax transparency and make
India's tax system more welcoming for foreign businesses and
investors. For example, numerous advance pricing agreements
(APAs) have been negotiated, and other initiatives to prevent
disputes put in place, over the past year to provide tax
certainty and avoid repeating past mistakes.
To date, Jaitley has fulfilled his goal of introducing the
GST regime and has made big strides in aligning India's tax
regime with international standards and the BEPS project.
Looking ahead, Jaitley is expected to turn his attention to
other prominent challenges that include ensuring India's
economic growth bounces back from the changes that have damaged
it in 2017 such as the GST regime and sudden demonetisation of
INR 500 and INR 1,000 banknotes. Consultations on the 2018-19
budget, which will be presented on February 1 2018, are
underway and Jaitley will use this opportunity to boost
The finance minister is a strong advocate of coordinated
policy actions and growth strategies, especially in light of
globalisation and multilateralism. His retention of a position
in the Global Tax 50 for a fourth consecutive year is
recognition of how his efforts have helped to transform India's
tax system. His ability to foresee future issues within India's
economic model has allowed for the development of new
initiatives like the GST regime.
While Jaitley continues his efforts to create a tax system
that competes with the international economy and attracts
investors in a competitive global market, taxpayers are working
to align their tax structures with the changes. His efforts to
improve the tax landscape for businesses operating in India
will help to foster relationships with other countries and
continue to provide various opportunities for business.