Build your professional network on facebook via our app Go to app
 
 
Posted in Community :

Corporate Tax Advisory

 

Is windfall profits tax is right or wrong?

Created by : Rakesh Chakraborty, Sr. Associate, ING  | 10 05 2008 15:19:31 +0000
Industry : BankingFunctional Area : Performance(Corporate Finance)
Keywords : Tax Right Wrong Windfall Profits
Activity:  213 views;  last activity : 07 06 2010 20:18:09 +0000

A day after Reliance Industries chairman Mukesh Ambani met Prime Minister Manmohan Singh to forestall political attempts to throttle his oil refinery business, the petroleum ministry has come out with a detailed presentation to show that the demand for the windfall profits tax (WPT) on private oil companies is 'short-sighted populism' and 'bad economics.' This is what they think, but does the general public think? Put in your valuable views.

  
Share
 
 
  Rate : 
 
 
Right Vs Wrong
1
 
 
 
 
1
1
1
Support   Support
 
0
0

I need to clarify that a windfall tax is to be levied when a windfall occurs. Has a windfall occured? The answer is yes. It is no one's case that such a tax shield be levied always. Secondly it is the argued that IT companies made a windfall and were not levied a windfall tax. But IT companies were not given a common property resource like petroleum which belongs to the Govt and the people. Contractual obligations are cited. You gave exploration rights with profit sharing on the assumption of certain oil prices. Upto 40 $ per Barrel this is fine. But beyond this it is a gross windfall. To argue that Govt gets a share via profit sharing is obtuse. You are the owner and you wish to be a beggar. The Ministry arguing the case against in this manner is a slap in the face of the common man.
By Rakesh Chakraborty, Sr. Associate, ING  | 10 05 2008 15:19:31 +0000
0
0

The ministry claims that WPT would neither help in reducing prices of petroleum products nor would it lead to any increase in output. WPT could lead to lower investment in the petroleum sector and undermine India's energy security. I doubt that the WPT would make investment and production by the domestic oil companies more expensive, and these companies should be incentivised to go in for drilling and that any deterrent will slow down any research that could help make future energy in the country less expensive.
By Ramesh Chana Verma, Associate, Franklin Resources  | 10 05 2008 15:20:11 +0000
Argue for "Right"
Argue for "Wrong"
 Found the debate "Is windfall profits tax is right or wrong?"  interesting ?  Suggest to your connections and communities  
Leading ITES/BPO Consultants
  • Create a confidential Career Profile and Resume/C.V. online
  • Get advice for planning their career and for marketing of experience and skills
  • Maximize awareness of and access to the best career opportunities
Viewers also viewed
During school in our arithmetic classes we were taught that:- “ SELLING PRICE = COST PRICE +...
 
260 referals 4 arguments, 75 views
Danger to India's BPOs and Call Centres? vs No danger to Indian economy!
 
381 referals 10 arguments, 405 views
more...  
Recent Knowledge (4)
WE HAD A GOOD NUMBER OF INVENTORS WITH GREATER VISION ABOUT THE SOCIETY. INVENTORS HERE NEED NOT...
 
2 referals 2 arguments, 97 views
These days as I switch on the tv or radio or look at a hoarding I do feel that power of ads I...
 
3004 referals 23 arguments, 492 views
C vs B
 
0 referals 3 arguments, 51 views
more...  
Sponsored Jobs
More From Author
Credit card statements provide a detailed list of all your expenses. It is just easier to keep a record and track expenses incurred using credit cards. Keeping track of cash expenses becomes difficult as one spends more and more in cash. It is not...
This budget lacks many things. It doesn't contains many things from Last year budget, no special measures has been taken to improve quality and security in trains. Number of trains has been increased which will increase train train traffic but no...
It has been seen over the years, whenever an income tax budget comes out, the salaried class and small businesses are more affected by rules related to income tax than the rules related to indirect taxes like sales tax and excise duty. Similar...
more...  
  • Popular Knowledge
  •  
  •  
  • Popular Jobs
  •