BUSINESS

Govt. to roll out road map for corporate tax reduction

Following up on the Finance Minister Arun Jaitley’s proposal in the Union budget, Revenue Secretary Shaktikanta Das said on Wednesday that the government in the next 45 days will unveil the road map of how it will go about reducing the corporate tax rate to 25 per cent over four years, and eliminate the existing incentives and exemptions.

Mr. Jaitley in his budget speech said that the corporate tax would be reduced from 30 per cent to 25 per cent over four years, and Mr. Das reiterated this on Wednesday, adding that the plan ahead would be revealed soon.

“We are now currently working on the removal, elimination of exemptions and incentives and some time in the next 45 days or so, we will be spelling out the road map for removal of exemptions and incentives,” Mr, Das said. Mr, Jaitley had pointed out how the current corporate tax structure meant that “we get neither revenues nor investments.”

“The basic rate of corporate tax in India at 30 per cent is higher than the rates prevalent in the other major Asian economies, making our domestic industry uncompetitive,” he had said in his speech. However, he added that, due to the various exemptions, the effect rate of collection was only 23 per cent.

The plan to go ahead with reducing the corporate tax rate and eliminate exemptions will be put up in the public domain so that the Finance Ministry can take cognisance of any inputs from the stakeholders, Mr. Das said.

The reason behind the phased manner of reduction the tax rate, according to Mr. Das, was that government finances cannot handle such a large cut in a single year.

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