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Nokia charges the tax raid on Indian factory was "excessive and unacceptable"

Lumia 620

Nokia released a statement today saying that it had sent a "letter of objection" to the Indian government following a January raid on its facility in Chennai over alleged back taxes totaling $545 million. The Finnish tech superpower firmly denied the allegations and said:

"The actions of the income tax authorities in Chennai are excessive, unacceptable and inconsistent with Indian standards of fair play and governance. We do not see any merit in any of the claims, and are ready to defend ourselves vigorously."

Nokia, whose second-biggest cell phone market is India, also stated that they have yet to receive "any official information" from the Indian government regarding tax claims. And they are not alone in their tax woes with India. Oil company, Royal Dutch Shell, and mobile giant Vodafone are both fighting claims by Indian officials.

In the wake of a bloated national deficit, India's finance minister P. Chidambaram, has made tracking down tax evaders a top priority. However, he says that he wants a "stable tax regime with clarity on tax laws" and to maintain a "non-adversarial" approach to tax collection.

How's that going for you, Minister?

Source: Reuters; Via: GlobalPost

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Reader comments

Nokia charges the tax raid on Indian factory was "excessive and unacceptable"

42 Comments

According to Transparency International, Finland is the least corrupt country in the world with a score of 90 and India has a score of 36(rank 94th) so it's no wonder Nokia doesn't know how to operate in India :)
(USA ranked 19th with a score 73)

Here in India, they are busy marketing 510 which they started selling in December 2012. Based on the ads, I get a feeling that they want 510 to be the low end option and the 820 + 920 to be the mid/high end option.
Just yesterday nokia announced a steep cut on 710, which is now just about 2000 rupees (roughly 40 dollars) more than 510. I don't think they will release 620 until the stock of 510 + 710 is over.

Hmm...why do I have a hard time believing Nokia? Do they want to convince me that they moved their factories from Europe to India, China and South America because QUALITY is better there? And that taxes and the easiness to evade them has NOTHING to do with it?
Yeah sure.
And the USA went to Iraq because of their weapons of mass destruction.

Wow... I hate to say it but you sound like a conspiracy nut job.  Large colmpanies do not move because they believe they have found a new location where it is easier to evade taxes.  They move because the government gives them incentives to do so, or because labor rates are cheaper... not because they believe they can cheat better.
 
Very strange line of thinking, especially with the notoriouslly corrupt government and officials in place in India.

Nokia has been executing business in India for 17 (seventeen) years. Your argument is invalid, and arrogant. And in addition to this, Nokia has stated that the labour cost is not the reason why they have moved their factories to Asia, it is the supply chain and lead times that counts. And when you are trying to say that the quality is somewhat weaker in some Nokia's factories, I would like to hear how Nokia's Dongguan factory in China (established in 1995 by the way) is a five-time winner of the Nokia Global Quality Award?
 
From your comment I would say, that you have followed Nokia for like... year or two?

wanna change my country from india to usa coz of the scamsters like chidambaram !! he shd be in jail coz of 2g scam .....these guys are ruinin d country n takin hard earned money from our pockets....the govt. might even arrest me for the comment coz they did it with one or two people...

the only grammatical mistake's in "from india to usa" nd i kinda knew abt it bt didnt wanna correct it at 1:15 in the night on my nokia 5800.....n ur no one to welcome me....i can easily get into MIT phd coz i'm from IIT, the toughest college to get an admission in.....LOSER

i dun care were u wen 2 colladge coz u type like a stoopid 13 yr old.... n i h8 reading dat wayz.....

i see what u did there....try typin on my phone....like hell.....gonna change it for l820 after a month or two but ur still no one to judge me

Chill out, I'm not judging anyone.  I'm just trying to make fun of him for typing like an idiot.  I have a dream of a future internet where people take the time to type in a coherent and legible manner.

Give one instance of corruption from Chidambaram or most senior ministers in the central Government? Stop passing baseless , sweeping statements. (Raja is gone). btw, I support the right wing BJP, and never vote for the left/congress - but give credit where it is due.
Govt has its own way of interpreting tax rules, Nokia has its own. Nokia is free to sue the Indian government and courts will decide whose argument has merit. Nothing to get worked up.
I hate the way you type - type shorter sentences, but avoid the sms lingo! Its PITA to read it.

I dont think this is the corrct forum to debate corruption,scams and corrupt politicians as all countries have this problem. What you are doing is demeaning to India's rep....Law will take its course and it is a fact that MNC's do exploit laws in developed as well as developing countries to gain advantage in some manner.

You do know that India is the third largest economy in Asia? Behind China and Japan. Just saying. So $545 million should not be much.

Sunnybyday - That has nothing to do with the tax issue. I was born and raised in India, and I know how the system works. It is worse now because of all the money pouring into India. It's all going into Swiss Banks. All the European companies should get together and take them to court, maybe to world court. And I'm not saying they shouldn't pay taxes.

I have a friend that had to pay multiple bribes to indian officials just to get his wife and children to be able to join him in America.  People don't understand what is going on there every single day.  We don't see that kind of thing today in the west so we don't think that it is occurring.  but it is.

I have many indian friends and colleages and I have learned from them how corrupt India is both first hand and through their stories about India and the culture their.
Even Indians whom I respect sometimes shock me by their statements.  They definitely see things differently than western countries do.  Fraud is acceptable, practiced and encouraged in the consulting industry today.  It is almost like a huge club that they are all members of.
 

When I was 18 I went to the municipal office to get my nephew's birth certificate only to be asked for a bribe first. My father always told me that the city, county, state and federal employees don't make enough to feed their families and hence it's ok to give them some money. This was in the 60's. Now it's gone to a whole new level. Still corruption is at every level. This case against Nokia and other western companies is/are fabricated to squeeze some money. But the game is bigger now. Nokia will have to bribe a whole bunch of employees. Maybe they should give them free Nokia Lumia 920s.

probably government officials are more facinated towards NL920, since they are not available in official stores they have just made their visit to the factory :)

Sounds like the Finance Minister is trying to save his hide by taking such action against foreign companies, including Nokia. I'm sure he wouldn't bother if the report on the national budget deficit didn't land on his desk which probably also include a warning letter from the President that he'll lose his job if he screwed up.