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Cyber Experts: Indian Government Needs to Speed Up Necessary Changes in Domestic Laws on Internet Taxation

India has not yet crystal clearly defined its holistic national approach and perspectives on taxation on the Internet

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The Indian approach on the Internet taxation has left much to be desired. Pixabay

With the Organisation of Economic Co-operation and Development (OECD) proposing an overhaul in the taxation system for digital companies, cyber experts on Thursday urged the Indian government to speed up necessary changes in domestic laws on internet taxation so that tech giants like Google, Facebook and Amazon can be asked to shell out taxes they have been evading for years.

The OECD on Wednesday published a proposal to advance international negotiations to ensure large and highly profitable multinational enterprises, including digital companies, pay tax wherever they have significant consumer-facing activities and generate their profits.

According to cyber experts, given the fact that India is not yet a part of OECD, it is imperative that India must be mindful of the way how things are evolving.

“The Indian approach on the Internet taxation has left much to be desired. India has not yet crystal clearly defined its holistic national approach and perspectives on taxation on the Internet,” Pavan Duggal, the country’s leading cyber law expert and privacy advocate, told IANS.

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The OECD on Wednesday published a proposal to advance international negotiations to ensure large and highly profitable multinational enterprises, including digital companies. Pixabay

However, it is essential that India is mindful of the global developments that are taking place in this regard and must come up with its own taxation approaches, which are in sync with the global trends that are emerging.

“Further, India needs to distinctly be walking in the path of ensuring that legal entities who are offering their services via the internet in India, whether they are physically present in India or not, would be subject to Indian taxation,” Duggal elaborated.

The new OECD proposal is based on the work of the OECD/G20 Inclusive Framework on base erosion and profit shifting (BEPS), which groups 134 countries and jurisdictions on an equal footing, for multilateral negotiation of international tax rules, making them fit for purpose for the global economy of the 21st century.

“We’re making real progress to address the tax challenges arising from digitalisation of the economy, and to continue advancing toward a consensus-based solution to overhaul the rules-based international tax system by 2020,” said OECD Secretary-General Angel Gurria.

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According to advocate Virag Gupta, in the K.N. Govindacharya petition before Delhi High Court in 2012, taxation of Internet companies was first raised when the government of India gave “Double Tax Avoidance Agreement: as reason to not tax foreign Internet companies.

The OECD proposal “may strengthen the case for taxation where these companies are having huge business or presence. But how can tax haven countries can be compelled to follow the OECD guidelines?” Gupta told IANS.

Countries like China, France and Germany have shown political will-power to tax Internet companies but India has miserably failed to tax Internet giants despite being the biggest market.

“India’s Parliament is supreme and sovereign to tax these companies for which necessary amendments are to be made in the Income Tax Act, Companies Act and Information Technology (IT) Act etc,” he suggested.

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According to cyber experts, given the fact that India is not yet a part of OECD, it is imperative that India must be mindful of the way how things are evolving. Pixabay

According to him, India was always free to tax these companies.

“In this current economic slowdown, OECD decision may enable government to bring new tax regime by which digital companies may be taxed,” Gupta added.

At the moment, the said OECD “Public Consultation Document” is only indicative of the consultation process wherein stakeholders have been asked to give their comments by November 12, 2019.

However, the approach could form the basis for subsequent evolution of jurisprudence concerning taxation in the context of the Internet.

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“The fact remains is that today, most of the companies offering services on the Internet are not paying their share of taxation in different jurisdiction. This is despite them taking the benefit and advantage of the markets of the said jurisdictions,” informed Duggal.

“Further, India needs to distinctly be walking in the path of ensuring that legal entities who are offering their services via the internet in India, whether they are physically present in India or not, would be subject to Indian taxation,” added Duggal, who is also a senior Supreme Court advocate.

There are immense amount of challenges in this regard.

New changes would be required in the existing Income Tax laws but more significantly as a nation, “we need to make up our mind as to in what manner, we want to contribute to the evolving taxation jurisprudence on the Internet”, Duggal emphasized.

“The top 15 Internet companies alone have amassed a value of over Rs 20 lakh crore due to their Indian users. The companies’ value could be a major chunk of the Indian economy but is serving no purpose to Indians,” informed Gupta. (IANS)

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AI Can be a Helpful Tool for Government to Deliver Public Services

Case studies in the report highlight how a competitive selection process may spell the way forward to discover and initiate pioneering AI technology in public service delivery

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Artificial Intelligence (AI) is emerging as a helpful tool for governments in the Asia Pacific region to deliver public services, revealed a new UN-Google report on Wednesday.

The study by the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) and Google cited case studies highlighting the importance of partnerships between governments and technology firms for the delivery of public services.

Among the case studies that the report mentioned included an AI initiative in India that informs farmers of the best sowing date to increase crop yields.

The state governments in Andhra Pradesh and Karnataka teamed up with Microsoft to develop predictive AI services to help smallholder farmers to improve their crop yields and give them greater price control.

Since 2016 three applications have been developed. The report discussed two of these apps — the AI sowing app and the price forecasting model.

Both of the AI applications improved the lives of smallholder farmers in southern India by bridging information gaps and mitigating growing environmental risks. These AI services have the potential to increase crop yields, prices and incomes, the study concluded.

“The best part of the project is that the investment required by the farmers to benefit from the technology is minimal: all they need are a mobile phone capable of receiving text messages and a subscription to the most basic mobile phone services,” said the report.

Clearly, to make a technology accessible and affordable is a crucial step towards technology for inclusiveness.

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“Artificial intelligence is now one of the fastest-growing areas in all of science and one of the most talked-about topics in society.” VOA

“On the path to the 2030 Agenda for Sustainable Development, governments in Asia and the Pacific are urgently pursuing innovative means to deliver effective, efficient and fair public services,” said United Nations Under-Secretary-General and Executive Secretary of ESCAP Armida Salsiah Alisjahbana.

“Frontier technologies such as AI hold promise to reimagine how the public sector can better serve sustainable development needs.”

The report also features insights as well as context-specific recommendations from deployments of AI in a variety of sectors: health, justice, agriculture, environment, insurance and social welfare.

Public-private partnerships will become increasingly important to complement government initiatives with industry knowledge and expertise, said the report.

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Amid the rapid pace of technological development, the report recommends that governments develop frameworks to regulate these partnerships and encourage more public information on AI projects to foster a landscape conducive to informed decision-making on AI partnerships.

Since applying AI in the public sector is still at an early stage of development, setbacks and a trial-and-error process may be inevitable.

Case studies in the report highlight how a competitive selection process may spell the way forward to discover and initiate pioneering AI technology in public service delivery. (IANS)