Taxation, Value Capture Main Issue In Data-Led Business - GADGETS INNOVATIONS


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Taxation, Value Capture Main Issue In Data-Led Business

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Amid raging debate about data localisation, privacy and liberalism, domain and industry experts addressing the SKOCH Summit here on Wednesday stressed that the real issues were taxation and tapping the economic values arising out of the citizen's data. A power panel on 'Whose Data is it Anyway' organised as a part of the 59th SKOCH Summit agreed that the main focus of negotiation and debate in the data-led business should be on making the companies pay for use of data resource. 

Ashwani Mahajan, National Co-Convener, Swadeshi Jagaran Manch, said the big multi-national companies like Apple, Google, Amazon, Microsoft, Uber and Facebook hardly pay any taxes in India but make billions of dollar in business every year. “Shell companies are made to evade taxes,” he said.

Moderating the panel Sameer Kochhar, Chairman, SKOCH Group, said multi-national companies make billions of dollar profit by dealing with the citizen data. “The economic values created from the data must come back to the country in the form of taxation,” Kochhar said. Debating about whether the data should be controlled by the foreign companies like Apple, Amazon, Google and Facebook or Indian companies like Tata and Reliance or the government would not make much difference in the lives of the common people. “The negotiation and debate should be on taxation and value capture,” said Kochhar adding the multi-national companies must be taxed fairly. “The fight is not about localisation vs globalisation. This is about taxation. This is about sharing the buck that the companies are making by using our data,” he added. 

The panel that included domain and industry experts from diverse background agreed that the economic values created from the use of data must remain in the country. Members of the panel included Vinit Goenka, Secretary, Centre for Knowledge Sovereignty, Vidur Gupta, Partner – Cyber Security, E&Y, Tanuj Bhojwani, Core Volunteer, iSPIRT Foundation, Rahul Sharma from The Perspective, Prasanto K Roy, Tech Policy and Media Professional and Pratibha Jain, Partner, Nishith Desai Associates.

The panel agreed that the data belonged to citizens but it is of no economic value if it is lying just with the individual. Huge economic value is generated when it is mined and used by the companies. While it may be impractical for the individual to monetise his/her own data, the country must monetise it in the form of taxes. Emphasising on the need for creating a better ecosystem for doing business, Pratibha Jain said the companies like Flipkart chose to set up their base in Singapore to avoid the hassles. 

Experts agreed that India's taxation system needs to be rationalised and there is need to create a favourable environment for doing business.“Data is a major source of money. At the broad level the money generated from our data is not coming back to India,” said Tanuj Bhojwani.

Data led businesses are of high-value capture. It would play a critical role in achieving the goal of $5 trillion economies by 2024-25 as set up by Prime Minister Narendra Modi government. Major value capture would be in the areas of new technologies like Artificial Intelligence, Robotics and Blockchain. Indian mind and labour have been the driving force behind these technologies whether in Silicon Valley, Bengaluru, Jaipur or Bhubaneswar. Business and regulatory environment have to be made conducive to harness the value arising out of the new technology. 

Although India has made good progress in ease of doing business ranking, the Panel agreed that the business environment remains very tough and challenging for startups and small businesses.

New Delhi, August 28

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