While we American businesses complain about our tax burdens, at least the overall system is timely and somewhat consistent!
In the huge nation of India, tax disputes over mergers and acquisitions have landed international conglomerates such as Nokia and Vodafone Group in court with billions of dollars at stake. One irritating law even allows tax collectors to reach backwards in time.
Bloomberg News recently described India’s tax practices as “whimsical.” In fact, the news service says none of 21 major insurance companies doing business in India will write what is called “tax indemnity” insurance, a common coverage in cross-border mergers. Underwriting deals in a place “where the law changes retrospectively is a challenge,” one official from a worldwide insurer said in a recent Bloomberg article.
India is not the only country considered by insurers to be too big a risk. On the other hand, the United States ranks among countries with relatively stable and transparent systems where insurers will offer the tax-related coverage, the official said.
ERIC’S TAKE!
While our U.S. system needs more funding to improve services to taxpayers along with simplification of its tax codes, it’s much better than most tax systems. Next up? How about fixing how politicians spend our tax dollars? Maybe we should be pairing elected officials with an “accountant” administrators to keep them from overspending!