Toronto: The India-Canada Tax Treaty needs to be re-evaluated and modernised so as to boost trade and investment between the two countries, according to an eminent tax expert.

Prof Vern Krishna in his book titled 'Canada India Tax Treaty' revealed that there is an urgent need to reduce or eliminate withholding taxes on interest on debt; equal and fair treatment for foreign investors similar to domestic companies.

He also called for mandatory binding arbitration provision, which will apply in cases where the competent authorities have not resolved certain issues within an agreed period. 

When the treaty was renegotiated in 1996, Prof Krishna said, "There was a minimum trade between the two countries and India was a developing country. But the situation has now changed. There is not only increase in trade and investment, but India is emerging as a developed country and in a  short time it will be a developed country".

"The economic emergence of India holds importance for Canada and its business community. Since India commenced its significant reform process in 1991, the country has moved from a closed economic approach to one that is increasing open and engaged", Prof Krishna who teaches law at the University of Ottawa opined. 

"There are many trade and investment barriers that must be resolved by mutual understanding and cooperation on a priority basis", he said. 

Source : PTI