OECD’s draft report on digital taxation is a complicated compromise | The Indian Express

OECD’s draft report on digital taxation is a complicated compromise | The Indian Express

Written by Suranjali Tandon |Updated: October 29, 2019 10:33:09 am

The writer is assistant professor, NIPFP

OECD’s draft report on digital taxation is a complicated compromise

The idea of consensus, though critical for international relations, must also be evaluated in light of the misalignment of economic interests between developing and developed countries. A good tax system is often evaluated along the axes of certainty, simplicity and neutrality.

In 2016, India was the first to apply an equalisation levy.

The proliferation of technology has challenged the conventional notions of economic activity. This is now a serious challenge for policy, particularly for taxation. The challenges of taxing digital companies are twofold. First, the existing laws tax business profits based on its physical presence in a country.