New Delhi: Industry body Ficci on Thursday urged the government to lower the corporate tax rate to 28 per cent from 30 per cent in the forthcoming Budget, a move that would boost the industry and help tide over the problems created by the US tax reforms.
Finance Minister Arun Jaitley in his 2015-16 Budget had promised to reduce the corporate tax rate to 25 per cent over the next four years. However, he has not been able to cut the rates.
"I am hoping that in this Budget, they will bring down the tax rate to 28 per cent at least to give a confidence that they are on that path," Ficci's new president Rashesh Shah said.
He further said that the cut in tax rates would also help the Indian industry in meeting the challenges emanating from tax cuts by the Trump administration in the US and its aftermath in other developing countries.
In December last year, Senate Republicans passed a sweeping overhaul of the US tax code in more than 30 years. The Senate approved the USD 1.5 trillion tax bill, which includes permanent tax breaks for corporations and temporary tax cuts for individuals, by a final vote of 51-48.
"Bringing the tax rate to 28 per cent will be a good start," he said adding that in the absence of the rate cut, the corporate sector would start becoming unproductive.
The government is scheduled to come out with the Budget for 2018-19 on February 1, which will also be the last regular Budget of the current government. On the economic growth prospects, Shah said he expects the economy to grow by about 7.5 per cent in the next fiscal.
The economy, according to some experts, is likely to record sub 7 per cent growth in the current financial year due to the impact of demonetisation and roll out of the Goods and Services Tax (GST). The government is slated to come out with the advanced estimates for the current fiscal on Friday.