Although Nokia still has a huge sales volume in developing countries such as India, the company seems on the very brink of leaving the country. Apparently, Nokia has run into tax trouble in India and blames the government for trying to impose illegal taxes on its operations.
According to the Indian government, Nokia is supposed to pay a whopping tax of $542 million. However, there are reports that Nokia is still waiting for a VAT refund and has also contested portions of tax, citing them as a violation of the treaties between Finland and India.
According to a statement issued by Nokia, “A holistic view is needed to understand the big picture and to ensure that possible short term benefits of aggressively changed fiscal policies do not override long term policies to develop Indian economy, create growth and jobs by attracting investments into India with predictable business environment as has been done in the past.”
The company further notes that given these tactics by the state, Nokia may have to reconsider its decision to invest in the country saying that, “It is very important that the Indian government corrects quickly these surprising actions of individual tax authorities against Nokia to restore the trust of Nokia and other multinational companies in India as a good place of business.”
Till now, India hasn’t apparently responded to this statement. However, it is expected that the tax issue is going to escalate, with the Indian government not ready to concede to Nokia’s wishes.