In­dus­try bod­ies want cor­po­rate tax rate re­duced

Other busi­ness hotspots like Singapore, Ma­cau and Hong Kong have cor­po­rate tax rates at 17%, 12% and 16.50% re­spec­tively.

The Sunday Guardian - - THE BIG STORY - DIBYENDU MONDAL NEW DELHI

With some of the ma­jor global economies re­vis­ing their cor­po­rate tax rates in order to boost busi­ness in their coun­tries, there is a grow­ing de­mand from cor­po­rate and in­dus­try bod­ies in India to de­crease the ba­sic cor­po­rate tax rate in India to bring in more con­fi­dence among the cor­po­rates in the coun­try.

The long-stand­ing de­mand from cor­po­rate and in­dus­try bod­ies has been to lower the cor­po­rate tax rate in India from the ex­ist­ing 35% to a flat 25%. This, they feel, would also boost for­eign in­vest­ments in India as well as in­crease tax col­lec­tions for the gov­ern­ment.

The United States has re­cently de­creased its cor­po­rate tax rate from the ex­ist­ing 35% to 21%, mak­ing the United States more com­pet­i­tive in at­tract­ing for­eign in­vest­ments. China has kept its cor­po­rate tax rate at 25%, while the Euro­pean Union has a cor­po­rate tax rate of 21.30%.

Other busi­ness hotspots like Singapore, Ma­cau and Hong Kong have cor­po­rate tax rates at 17%, 12% and 16.50% re­spec­tively.

Also, the av­er­age world­wide cor­po­rate tax rate has been show­ing a de­creas­ing trend since the last 10 years, and now stands at 21%. The trend for lower cor­po­rate tax rate in the world had been adopted to in­crease for­eign investors and help in the growth of the econ­omy.

The Con­fed­er­a­tion of In­dian In­dus­try (CII) and FCCI (The Fed­er­a­tion of In­dian Cham­bers of Com­merce and In­dus­try) have also sent their rec­om­men­da­tion to the Min­istry of Fi­nance ahead of the Bud­get ses­sion next month, to de­crease cor­po­rate tax rate in India to 25% to boost in­vest­ments and con­fi­dence in the cor­po­rate sec­tor in India.

In a let­ter to the Min­istry of Fi­nance, the CII has re­quested the Min­istry to re­duce the cor­po­rate tax rate in India to 25% “un­con­di­tion­ally with­out any turnover cri­te­ria, which should fur­ther be brought down to 18% in a phased man­ner”.

FCCI has also rec­om­mended the gov­ern­ment to re­duce the cor­po­rate tax rate across the board to 25% to boost eco­nomic growth and in­crease over­all tax col­lec­tion.

A spokesper­son from FCCI told this cor­re­spon­dent: “It is very im­por­tant for India to re­assess its cor­po­rate tax rate to main­tain its com­pet­i­tive­ness in the global mar­ket. Higher tax rate in the cor­po­rate struc­ture makes the coun­try unattrac­tive for for­eign investors at a time when the global av­er­age of cor­po­rate tax rate is on the de­cline. The lower tax rate also means greater col­lec­tion of taxes by the gov­ern­ment.”

A CII spokesper­son told this news­pa­per. “The CII has also sent its rec­om­men­da­tion to the gov­ern­ment to re­duce its tax struc­ture. The cor­po­rate tax rates, com­pared to other global com­pa­nies, are quite high in India. We need to bring it down to re­main an at­trac­tive in­vest­ing des­ti­na­tion. We have been de­mand­ing that the cor­po­rate tax be re­duced to 25% wholly and fur­ther be re­duced to 18% in a phased man­ner in the com­ing years.”

REUTERS

An Apple Watch Se­ries 4 is shown sub­merged in a Cat­a­lyst wa­ter­proof case dur­ing the 2019 CES in Las Vegas, Ne­vada on Wed­nes­day.

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