Donald Trump’s proposed new tax regime makes IT clients in the US adopt a cautious approach

GP News
10 March 2017 - 10:05 AM

American clients of India’s $150 billion IT and ITES industry are presently spending anxious moments as they are apprehensive that the Donald Trump administration may soon introduce a fresh tax regime that would have an adverse effect and no longer make overseas outsourcing an economically viable option for the American companies.
Mr. Girish Vanvari, National Head, Tax at KPMG India, recently said that the worry for several companies that are outsourcing work from the the USA is that, going ahead, they may incur additional taxes to the tune of around 20% if they continue to offshore business under the new laws that may soon be introduced within a year or so. 
An immediate effect is that many firms are now preferring to go for short term deals. Recently, a leading American Bank that outsources its work to an Indian IT company informed the service provider that henceforth they would only be signing short-term contracts.