09/09/2011
NEWS STORY
Mat Coch writes:
The Indian Grand Prix is facing yet another challenge in the lead up to the inaugural race next month.
Concerns over local tax laws have prompted Martin Whitmarsh, Chairman of the Formula One Teams Association (FOTA) , to ease concerns that the race could be boycotted.
The latest concern surrounds legislation which would force teams to pay a tax bill for a portion of their income, a situation the Formula One Team's Association is currently working hard to resolve. "The teams are concerned about the implications of withholding tax in India and being taxed locally," Whitmarsh told the BBC.
"This affects all the teams and the drivers that are going there and at the moment the teams are working together to resolve it," he added. "You don't go somewhere if you're going to be penalised."
The McLaren team principal shed further light on the situation in an interview with SpeedTV, prompting some sections of the media to suggest the inaugural event could be boycotted. "The teams need to receive the appropriate reassurance to be able to go to India," he said. "There is a significant worry and concern among the teams and it needs to be resolved. I am sure it will be but, if it weren't to be resolved then it would threaten the race, wouldn't it?"
However despite his warnings Whitmarsh remains confident a solution can be found. "It's an issue of withholding tax. It's not an unfamiliar one," he admitted in the same interview. "There are tax treaties between countries and it's an extraordinarily complex matter. All of the financial directors within FOTA are working together and are very concerned about it. We've employed Ernst and Young as consultants to help find a solution, and hopefully we will."
It was a sentiment he reiterated with the BBC: "We have been unable to, thus far, get assurances from the Indian tax authorities that this manner will be resolved in a satisfactory manner.
"There is a concern, we do need to get it resolved but I'm sure it will be resolved, so we shouldn't get too excited about it. It'll be fine."
This is the latest in a string of challenges for the Indian race organisers, who have had to continually issue reassurances over security for the event. Recently they've also had to quell an uprising from local farmers who threatened to dismantle the Buddh International circuit if they didn't receive greater compensation for their loss of land.