Industry body urges 15% income tax, corporate tax and GST peak

0

Nirbhay Kumar

New Delhi, November 21 (UNI) As the Center prepares to begin consultations with industry for the Union budget, industry body PHDCCI has proposed to maintain personal income tax, l corporate tax and the maximum rate of GST at 15% to stimulate demand and investment in the country.

Speaking to UNI, PHDCCI President Pradeep Multani said personal income tax should be reduced to 15% from the current maximum rate of 35% in order to increase the disposable income of the population, which would cause the demand curve to push up.

“When it comes to corporate tax, our view is that whether they are sole proprietorships, limited liability companies (LLPs) and businesses, whether old or new , there should be a flat corporate tax of 15% in all areas, ”Multani said.

Offering a mega concession to industry, the central government in September 2019 cut corporate tax rates to 22% for domestic companies and 15% for new domestic manufacturing companies in addition to other tax breaks. The total annual income lost to the corporate tax rate reduction and other relief has been estimated at Rs 145,000 crore.

The head of PHDCCI said personal income tax is currently very high in the country because the base is low, which means fewer people are paying taxes.

“This is higher than almost all advanced and emerging economies. But our tax-to-GDP ratio is only 17%. In comparable economies like China, Korea, Malaysia and Indonesia, the tax ratio / Average GDP is 22%, “he said, attributing India’s low tax-to-GDP ratio to tax evasion.

“Tax evasion is high due to the higher tax rates,” he noted.

Multani further said that the maximum rate of the GST should not exceed 15%, because the current highest bracket of 28% gives people an incentive to evade tax.

“If someone buys a product worth Rs 100,000 and the maximum GST rate of 28% is levied, then Rs 28,000 would be taxed. If the tax rate is that high, people would tend to evade tax, ”he said.

In order to attract foreign investment and encourage domestic players to expand their business, Multani suggested effective implementation of one-stop shop and lowering the cost of doing business.

He suggested that the government commission an expert analysis of the cost structure in China and provide a level playing field for Indian industry.

“Let the government do the analysis of China. We don’t even need 0.1% more. What we’re saying is the incentives that China gives its industry, we should also get the same cost.” , said the head of PHDCCI.

UNI NK


Source link

Share.

Comments are closed.