CanadaandIndiahave a lot in common. Both countries are complex democracies with rich diversity and some shared goals. In addition to this, both countries are working very closely with each other to enhance trade to boost their respective economies.
This month ministers from eight different states and officers from 15 states ofIndiawere inOntarioto learn more about tax reform. These ministers representedIndia’s empowered committee on taxation. These ministers represented wide array ofIndiacoming fromNew Delhi,Punjab,Jammu and Kashmir, Haryana, Madhya Pradesh, Mizoram and Odisha. This committee is tasked to study the Canadian experience of implementing the goods and services tax.
It is always tricky for ruling parties and governments to talk about taxes. Any mention of tax can, and most of the times’ is interpreted as a burden on businesses and people alike. What better place to learn about tax reform thanOntariothat enforced the Harmonized Sales Tax (HST) just a few years ago.Ontarioenforced the HST with not as much outrage asBritish Columbiadid.
Former Ontario Minister of Revenue John Wilkinson was at hand to shareOntario’s experience of the HST implementation with various Indian ministers and delegates. The HST was implemented inOntariowith the help from the federal government. Delegates fromOntarioshared their experiences of working with the federal government in enforcing the HST.
With the changing global economy, taxation needs to be constantly revised to meet the needs the businesses so that they operate effectively and efficiently. Tax reform is especially important now that the Indian government has passed its economic liberalization agenda to re-attract foreign direct investment (FDI). This agenda will allow global companies to increase their equity caps in Indian civil aviation, broadcasting, and power trading exchanges. In supermarkets and department stores, a 51 per cent foreign investment will now be allowed. Foreign aviation carriers will be able to buy a 49 per cent stake in Indian private airlines and FDI in all broadcast-carriage services has been raised to 74% from 49% previously.
This economic liberalization has potential to attract many Canadian businesses to India. If India can make it easy for foreign businesses to operate, surely India’s growing economy will see a huge boost and Canada can benefit from its growing and influential Indo Canadian community.