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Indian Coffers Lose Out To Software Piracy

by Mary Swire, Tax-News.com, Hong Kong

03 June 2011


A new study from the Business Software Alliance and International Data Corporation of India has urged the government to crack down on software piracy, which it says blights the industry's progression and deprives national coffers of over USD800m in lost taxes per year.

The figures are based on 2009 estimates of the use by businesses and private individuals of pirated software and show that in 2009 USD846m in tax was lost, USD533m in indirect taxes and USD313m in direct tax.

According to the research, in 2009, 65% of software used was illegitimate, costing the Indian software industry USD2.27bn. Piracy levels have dropped just 1% since 2009, according to 2010 statistics released to coincide with the report's publication. Software piracy has steadily declined by 11% since 2004 but BSA has urged the government to redouble efforts to tackle the practice to bring about major economic benefits in India.

The chair of the committee of the BSA, Keshav Dhakad said:

"These findings show that there has been gradual progress in reducing the software piracy rate in India, but what is needed is a speedier drop as India's PC market grows in size."

"The further we reduce software piracy and grow the legitimate software product market, the greater the benefits to the Indian economy in terms of new jobs, increase in tax collections, contribution to GDP, growth of the domestic IT product industry and consequently PC/IT security in the nation as a whole."

"India is the second fastest growing economy in the world with a high growth PC market, whereas the software product market is lagging behind."

Dhakad explained that if compliance was enforced and the rate of piracy was reduced by 5% in 2011, the government would see an additional USD95m in tax revenues, and gain further from the growth in the IT sector, expected to increase GDP by USD790m and create 26,000 new jobs.

TAGS: individuals | compliance | tax | business | India | law | intellectual property | copyright | enforcement | revenue statistics

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