TAX­ING TAXES

A more en­light­ened and ef­fec­tive tax­a­tion pol­icy can en­able the In­dian in­dus­try soar to greater heights

SP's Airbuz - - Policy Taxation - BY NUPUR SAR­RAF

WITH A MAR­KET SIZE of around $16 bil­lion, the In­dian avi­a­tion in­dus­try, which is the ninth largest civil avi­a­tion mar­ket in the world, is fore­cast to be the third largest by 2020. There is much dis­cus­sion and de­bate in the in­dus­try re­gard­ing the steps that the govern­ment can and must take to re­alise this po­ten­tial and en­sure ro­bust growth. More of­ten than not, in­fra­struc­ture devel­op­ment and a clear and de­fined pol­icy are cited as key levers to pro­vide the de­sired im­pe­tus to the civil avi­a­tion in­dus­try. How­ever, in or­der to de­velop in­fra­struc­ture and fund other pub­lic devel­op­ment work, it is cru­cial for any govern­ment to levy tax in var­i­ous forms. But it is equally im­por­tant to take into ac­count the im­pact of the tax struc­ture could have on the in­dus­try.

The tax struc­ture for­mu­lated by the govern­ment not only di­rectly af­fects the bot­tom line of any com­pany, but also can make the do­mes­tic in­dus­try seg­ment at­trac­tive or unattrac­tive when com­pared to in­ter­na­tional economies. This ar­ti­cle high­lights some of the key tax is­sues with re­spect to the In­dian civil avi­a­tion in­dus­try that can en­able it to soar to even greater lev­els.

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