Partho Shome, ITIC Board Member, leads Indian Tax Administration Reform Commission

On 26 January 2016, several leading Indian newspapers reported on a speech by Minister of Finance Arun Jaitley at the Platinum Jubilee celebration of the Income Tax Appellate Tribunal (ITAT). Referring to the report of the Tax Administration Reform Commission (TARC) chaired by Dr. Parthasarathi Shome, Minister Jaitley said, "The Shome Committee report…has suggested reforms in tax administration…(it) has given several recommendations that we are at a very advanced stage of looking into." There was widespread media speculation that the Finance Minister would address TARC recommendations in the forthcoming Union (national) Budget on 28 February.

The TARC was set up by the previous Indian government to "review application of tax policies and laws in the context of global best practices, and to recommend measures for reforms required in tax administration." Shome’s Commission submitted four reports and two summary volumes to the present Indian Government, outlining many administrative and legal tax reforms. Among others, it recommended the merger of the two separate direct tax and indirect tax Boards, which it found to artificially separate administrative functions that should be ideally combined, following prevailing global practices.

Dr. Shome currently is Chairman, International Tax Research and Analysis Foundation (ITRAF) in Bangalore, and serves on the Board of Directors of the International Tax and Investment Center.

ITIC Releases Principles for Developing Country Hydrocarbon Investment Policies

The International Tax and Investment Center, a nonprofit research and educational organization, has developed a set of principles for hydrocarbon investment policies that experts believe will assist in the dialogue between developing countries and prospective oil and gas exploration and development investors. The Principles for Developing Country Hydrocarbon Investment Policies are designed as a possible framework for collaboration between countries and investors to ensure countries obtain full value for their resources while attracting and sustaining the substantial investments and operational expertise needed for efficient, safe and environmentally sound resource development. Consistent with ITIC’s mission to bring parties together for dialogue on important fiscal, taxation, and investment policy issues, this set of oil and gas investment principles is an important starting point for countries and investors as they seek to work together in promoting economic development and attracting international investment.

These principles are a product of extensive dialogue among several leading international financial institutions and a number of oil and gas companies with vast international experience.  The principles were finalized and adopted by ITIC’s Oil and Gas Taxation and Regulatory Working Group, which will facilitate discussion of the principles with officials in various countries as we as multiple-stakeholder sessions.

The Principles for Developing Country Hydrocarbon Investment Policies can be viewed here.

*Karl Schmalz has over 37 years’ experience working for major international oil companies as a tax executive. He is currently a senior advisor to ITIC.

ITIC-EEC Meeting in Moscow

ITIC’s Mukhit Akhanov met this week in Moscow with Timur Suleimenov, Minister of Economy and Finance of the Eurasia Economic Commission (EEC), who has recently been reappointed for a second four-year term to begin on 1 February. The EEC chairmanship will pass from Russia’s Vitkor Khristenko to former Armenian Prime Minister Tigran Sargsyan on 1 February 2016, and a restructuring of the EEC Secretariat is expected by mid-March. New member states Kyrgyzstan and Armenia are expected to assume important positions among the EEC leadership, perhaps the portfolios pertaining to oil and gas and customs policy.

During the planning discussion for 2016, Minister Suleimenov confirmed his participation in the Eurasia Tax Forum in The Hague in June 2016 and in other ITIC programs throughout the year.

Tax and Investment: International Comparisons

Introduction

Since initiating a comparative study of potential investment destinations in Eurasia in the mid-1990s, ITIC also reviews comparative annual studies of economic performance conducted by the World Bank (the “Doing Business” Report), the EBRD (Transition Report), the World Economic Forum (Global Competitiveness Report), the Heritage Foundation (Index of Economic Freedom), the Fraser Institute (Economic Freedom of the World), IMD Lausanne (World Competitiveness Yearbook), and the Legatum Institute (Prosperity Index), among others.

As a background resource, below are the results of the various 2015 comparative studies. The comparisons below, instructive, may not precisely reflect the most current data, and some experts question the methodology for the “tax” parameter used in “benchmarking” reform. This issue will be further examined during 2016, and ITIC welcomes sponsor input on this and on the country rankings themselves.

Notwithstanding the varying purposes and methodologies of these studies, tax is a common parameter whether explicitly in the WB/DB Report and WEF/GCR or subsumed under another topic in other studies.

Consistent with ITIC’s near-term regional plans, we have examined the rankings of the following countries:

• Asia-Pacific – Thailand
• Africa – South Africa
• Eurasia – Kazakhstan
• Latin America – Brazil
• Middle East/North Africa – Jordan

Mr. Townsend's full report can be viewed here.

ITIC-Endorsed Event: Tax Policy Symposium in Washington, DC

Over the years, ITIC has cooperated with the Tax Council Policy Institute (TCPI), a Washington, DC, association of top corporate tax officers. The Tax Council organizes high-quality events that bring together excellent speakers addressing the most relevant current and future taxation issues. We thought that you and/or your colleagues might be interested in attending their upcoming 17th Annual Tax Policy & Practice Symposium, Capital Matters: How Taxes Influence the Global Creation, Deployment, and Mobility of Capital, on 11-12 February at the Ritz-Carlton in Washington, DC. For the most up-to-date information on the conference, including how to register and the program agenda, please click here.

For quick reference, the conference brochure can be viewed here.