India will remove its equalization levy – a levy levied on digital services provided by foreign companies, known as the 'Google Tax'.
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The change was announced in Tuesday's Budget, where Finance Minister Nirmala Sitharaman proposed [PDF] that the levy "shall cease to apply on or after August 1, 2024."
"Some stakeholders have expressed concerns that the scope of the two percent equalization fee is ambiguous and, as a result, leads to compliance burdens," explained [PDF] a finance bill-related document released this week.
The 'Google Tax' was introduced in 2016 to ensure that digital giants – especially foreign ones – pay their fair share of taxes on revenue generated from Indian users. Although the nickname refers to Google, it is currently paid by companies that pull in over 2 crore rupees ($239,000) in revenue per year.
