Budget 2019: FICCI suggests 25% cut in corporate tax across board to spur economic growth

New Delhi: Industry chamber FICCI on Sunday recommended the government to cut corporate tax rate across the board to 25 percent irrespective of turnover in the forthcoming budget to spur economic growth and increase overall tax collections. The chamber has also suggested revision in the tax slabs for the individual taxpayers with the top 30 percent rate to be applied beyond Rs 20 lakh annual income.

“Businesses today are faced with high tax cost leading to increased cost of production and resultant lower surplus for reinvestment and expansion. The basic corporate tax rate of 30 percent coupled with dividend distribution tax rate of 20 percent makes the effective tax cost for a company too high,” FICCI said in a statement.

As part of its pre-budget recommendations for 2019-20, it said with many key global economies going for significant rate cuts, there is a need for India to consider across-the-board rate cuts for businesses. [caption id=“attachment_5890331” align=“alignleft” width=“380”]  Representational image. Reuters[/caption] It has recommended reduction in the rate of Minimum Alternate Tax as the current rate of 18.5 percent is “quite high”. “The burden of MAT should also be gradually reduced from the current levels to a rate which will be commensurate with the phasing out of tax exemptions and incentives,” the Federation of Indian Chambers of Commerce and Industry (FICCI) added. Besides, it asked for continued weighted deductions under the Income Tax Act, 1961, to various modes of scientific research expenditure; deduction for corporate social responsibility expenditure; and increasing the overall deduction limit to at least Rs 3 lakh under the Act. It is also recommended that tax exemption limit of Rs 50 per meal to employees should be revised to at least Rs 200 per meal, to factor in rising inflation. An interim budget is expected to be presented by Finance Minister Arun Jaitley on 1 February.     To keep watching India’s No. 1 English Business News Channel – CNBC-TV18, call your Cable or DTH Operator and ask for the Colors Family Pack (inclusive of 24 channels), available for Rs. 35/- per month, or subscribe to the channel for Rs. 4/- per day. To keep watching the Leader in Global Market & Business News – CNBC-TV18 Prime HD, call your Cable or DTH Operator and ask for the Colors Family HD Pack (inclusive of 25 channels), available for Rs. 50/- per month, or subscribe to the channel for Rs. 1/- per day.