CII demands lower corporate tax rate, more govt expenditure : 29-05-2019

Industry body Confederation of Indian Industry (CII) has called for lowering corporate tax rate, kick-starting government expenditure and rationalisation of dispute tax resolution mechanism.

Presenting its demands before revenue secretary Ajay Bhushan Pandey on Monday in the context of the upcoming Union budget, CII said that dividend distribution tax should be rationalised to 10% (from 15% currently), and should be taxed at the hands of the recipient.

Long-term capital gains tax on equities and MAT should be removed while the weighted deduction for research and development should be extended for a further period of 10 years, it said, adding that the government stake in public sector banks should be reduced from 70% currently to 51% to enable capital infusion and promote efficiency in public sector banks.

The NDA government during its first tenure between 2014-2019 reduced the corporate tax rate to 25% from 30% for companies with revenue of up to Rs 250 crore. While this covers nearly 99% of all firms filing income-tax returns, the promise of 25% corporate tax rate across the board didn’t materialise. The government has said it can’t afford to cut taxes for the 7,000 large companies unless the direct tax collections improve further.

After the meeting, CII in a statement said that India currently has one of the highest corporate tax burdens among comparable economies.

Source : Financial Express