India needs to provide stable tax environment to attract investments: report

India needs to provide stable tax environment to attract investments: reportThe Indian government needs to provide a stable tax environment as well as simplify procedures in line with global practices to attract investments, a report prepared jointly by the Confederation of Indian Industry (CII) and Ernst & Young (EY) said.

In a white paper, the CII and EY suggested that a stable environment was necessary to foster investments, promote economic growth and facilitate job creation.

Making the suggestion, the industry body and consultancy group added, "Our country needs a tax system which is simple, broad-based, less litigious and transparent and ensures international competitiveness.  We need to benchmark our systems with international best practices."

The report cautioned that it would not be desirable on the government's part to take unilateral decisions as it would create uncertainty for the taxpayers.

National tax leader Sudhir Kapadia, of E&Y, suggested that the government should accept the Shome Committee's proposals on indirect transfers as it would be of great benefit for the FII structure.

In addition, the white paper urged the government to make the compliance rules for taxpayers simpler because safe harbour rules keep on imposing the burden of upholding transfer pricing documentation on taxpayers.