Corporate Tax

Trade affiliation is pushing for revenue tax, corporate tax and GST peak to be set at 15%

Nirbhay Kumar

New Delhi, November 21 (UNI) As the Center prepares to open consultations with industry on the Union’s budget, the industry association PHDCCI has proposed leaving income tax, corporate tax and the top GST rate at 15% in order to reduce the Demand and investment in the land.

Speaking to UNI, the President of the PHDCCI, Pradeep Multani, said that personal income tax should be reduced from the current 35% to 15% in order to increase the population’s disposable income, which would lead to an acceleration of the demand curve.

“As for corporate tax, we believe that there should be a flat 15% corporate tax rate for corporations, LLPs (Limited Liability Partnerships) and corporations, old and new,” said Multani.

The central government offered the industry mega-concessions and in September 2019 had lowered corporate tax rates, among other tax breaks, to 22% for domestic companies and 15% for new domestic manufacturing companies. The total annual revenue foregone on corporate tax cuts and other reliefs was estimated at Rs 1.45,000 crore.

The PHDCCI chief said that income tax is very high in the country right now because the tax base is low, which means fewer people are paying taxes.

“It is higher than in almost all industrialized and emerging countries. But our tax rate is only 17%. In comparable economies such as China, Korea, Malaysia and Indonesia, the average tax rate is 22%. “He said, putting the low tax rate in India down to tax evasion.

“Tax evasion is high because of the higher tax rates,” he noted.

Multani went on to say that the top GST rate shouldn’t be more than 15% as the current highest of 28% encourages people to evade taxes.

“If someone buys a product worth 100,000 rupees and the maximum GST rate of 28% is charged, then 28,000 rupees will be taxed on it. When the tax rate is that high, people would tend to evade taxes, ”he said.

In order to attract foreign investment and encourage local players to expand their businesses, Multani proposed effective implementation of single window clearance and reducing business costs.

He proposed to the government to have experts carry out an analysis of the cost structure in China and to offer Indian industry a level playing field.

“Leave the analysis of China to the government. We don’t even need 0.1% more. What we say is that the incentives that China gives its industry, we get at the same cost,” said the PHDCCI chief.

UNI NK

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