2 Responses

1. Justin says:

   April 24 2012 at 8:08 am

   Re: Vodafone & India

   You are ill-informed in seeking to conclude comparisons with propsed retroactive legislation in the UK and India.

   Firstly, you cannot compare India’s and the UK’s response to Vodafone and Barclays. If India was to follow the UK example of retroactive legislation, as was the case after Padmore, the Vodafone case would be exempt, grandfathered, from any legislation in order to observe the rule of law. The UK has legislated retroactively where court decisions have gone against it – but it has never applied the retroactive legislation to a succesful litigant (as evidenced by Padmore and others) . This is respecting the rule of law by not overturning decided court cases.

   Secondly, the Barclays situation emanates from the 2009 Code of Practice on Taxation for Banks where signatory banks agreed to stop artificial tax avoidance. It was only towards the end of 2011 that HMRC became aware of Barclays were involved in various schemes that didn’t appear to be accordance with the 2010 legislation and the Code of Practice. So the 2012 Finance legislation intends to amend the 2010 (post STARS) law to counter the scheme. Usually such amendments would operate from the date of the announcement but in this particular sitaution, aspects will operate from December 2011 in order to deny Barclays the tax benefits of the scheme. This means the legislation is backdated for less than 3 months (not the 50 plus years proposed by India’s legislation).

   Therefore to compare the infrequent and specific use of retroactive tax legislation in the UK with wide-ranging retroactive changes to Indian tax law after Vodafone totally misstates the situation.

   For you to suggest that as the UK uses retroactive tax legislation, therefore the Indian proposals follow UK precedent, are therefore acceptable and that Osborne is a hypocrite fails to understand the differences between different types of retroactive tax legislation and the particular circumstances of Barclays and Vodafone.
   • Richard Murphy says:

     April 24 2012 at 8:53 am

     This is an absurd argument.

     In both cases the governments acted to close off sdeliberate abuses that exploited defects in the law at enormous cost to the people of the countries in question.

     Apparently it is OK for ther UK to do this, but mot India. Even Osborne says so. But this is just straightforward neo-colonial patronisation of India.

     Of course India was right to take action.

     And it is absolutely right to do so to stop deliberate abuse via tax havens. The message is loud, clear, simple and right.

     We shoulkd be saying the same.