India: the Parliament passes new taxing system
The Indian Parliament has passed an amendment to the Constitution that will make indirect taxes uniform throughout India. The aim is to drastically simplify the current mechanism whereby every State of the Union sets its own tax rates on goods and services. The Goods and Services Tax (GST) will be put into effect in April 2017 and, in the meantime, will need to be passed by the Parliaments of every Federal State. However, yesterday’s Parliamentary vote kicked off what many people define as the most important economic reform since the liberalization process begun in 1991. The new taxing system introduces the “one nation, one tax” principle and is expected to lead to a full-fledged single market within the Union of India. According to analysts, on the medium term, the GST will trigger the Country’s economic growth with a 2% rise in GDP and generally improve its business environment.