Tax Policy for the Social Media To be Loud and Clear
By MYBRANDBOOK
A report says, Google, Facebook made Rs. 10,000 crore in India and paid just Rs. 200 crore as tax in India. Now Modi 2.0 government plans to bring companies that derive revenues from Indian users but pay taxes elsewhere into the corporate tax net.
So there is an urgency need of the Data privacy law, so that Personal Data Protection Bill mandates storage of personal data on a server or in a data center located in the country, citing the need to protect the autonomy of individuals and their personal data. The bill, considered by the government, approval awaited from the government.
Now a million-dollar question comes on how much Google pays tax to the Government with their subsidiaries here and making a lot of money.
Whereas, If any other Indian company would have done the same business - online or offline - they would have ended up paying a lot of taxes, so we must know on how much tax they pay to our country, a subject and matter expert says.
Facebook has nearly 300 million users in India, which is no.1,followed by USA, and WhatsApp had 200 million users in the country, making it the largest user base for both firms by touching about 500 Million users, doing a good business. Facebook had posted a profit of Rs 40.7 crore on revenue of Rs 341.8 crore in fiscal 2017-18. Facebook’s FY18 numbers are not available yet. In September, Reuters citing unnamed sources, had reported that Facebook is expected to generate revenue of $980 million from India in 2018. Absolutely, the tax amount to be paid to the Government has not come yet. Sources said, as India recentky had the General Election in 2019,a huge amount has been spend by the political parties.
As published in economic times, In fiscal 2018, Google India reported a 30% increase in revenues to Rs 9,337.7 crore with profit after tax rising 33% to Rs 407.2 crore. The amount transferred for “purchase of advertising space”, increased by 36% to Rs 4,949.6 crore, according to regulatory filings.
Realising the fact that India was losing out on revenue from digital firms billed overseas, the government in June 2016 introduced a 6% tax in the form of an equalisation levy or known as Google tax on the amount paid to internet companies by advertisers.
In the Union Budget 2018-19, the government also proposed to amend the Income Tax Act to tax digital entities with a large user base or significant economic presence in the country.
Experts says, India is still losing out on tax revenues since it is not valid on services such as annual or monthly subscriptions to streaming websites, and amount paid for the promotions through platforms such as Facebook.
Now, data localisation seems to be government’s latest vision to get the actual business they have done in India then India can get the dues.
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