Union Finance Minister’s adviser Parthasarathi Shome on Monday favoured lowering of corporate taxes saying it would lead to higher growth and development.
“Lowering of corporate taxes will result in higher job growth and is more development oriented,” Mr. Shome said at an interaction organised by Bharat Chamber of Commerce in Kolkata.
Mr. Shome said marginal rates of taxation for high net worth individuals (HNIs) in India was not steep as compared to countries like the UK and the USA. Persons having an income of Rs. five crore, for instance were taxed at 30 per cent plus a surcharge.
“This, according to me, is low by any standards and should be raised to bring vertical equity in the taxation structure in the country. In India, that can go higher and it is not wise to slash top marginal rates. Some equity correction needs to be done,” Mr. Shome said.
He also pointed out that some MNCs were engaged in profit shifting leading to payout of lower effective taxation. “This has become an anathema to most of the governments and has become a major issue in international taxation.”
Mr. Shome said the next meeting of Tax Administration Reforms Commission would be held next in the city on February 20 and 21 to discuss various issues. Such meetings have already been held in Mumbai, Bangalore and Chennai.