शून्य डिजिटल सेवा कर वादा 'सिकुड़ता' संप्रभु नीति स्थान

Pillar One and Pillar Two are components of the OECD-led global tax deal. Pillar One aims to redistribute taxing rights, potentially impacting how multinational companies are taxed. Pillar Two sets a global minimum corporate tax rate. Understanding these pillars is crucial for answering economy-related MCQs in Prelims.

India opposes the deal because it fears a reduction in its sovereign policy space, especially in taxing digital services. The zero digital services tax promise could curtail India's ability to generate revenue from multinational tech companies, impacting its fiscal autonomy.

The 'zero digital services tax promise' is a component of the global tax deal that could prevent India from independently taxing digital services provided by multinational tech companies. This directly impacts India's fiscal autonomy, as it limits the country's ability to generate revenue and fund domestic programs.

If India is unable to tax digital services effectively due to the global tax deal, it could lead to reduced revenue. This reduction in revenue could then limit the government's ability to fund various domestic programs and initiatives.

Several countries are moving forward with implementing aspects of the global tax deal. The European Union has adopted a directive to implement Pillar Two, setting a minimum corporate tax rate of 15%. Other countries, including the UK and Singapore, are also planning implementation.

In your Mains answer, highlight India's concerns about reduced policy autonomy, especially regarding digital services tax. Discuss the potential impact on revenue generation and the ability to fund domestic programs. Also, mention India's consistent opposition to the deal and the implications for its fiscal sovereignty.