New Delhi: India Inc on Wednesday asked Union finance minister Arun Jaitley during a pre-budget meeting to slash tax rates across board — for both corporate and individuals — to create demand in the economy hit by demonetisation and GST jitters.
On his part, Mr Jaitley asked the corporate leaders to make investments in infrastructure sector to build a stronger India.
Finance minister said that private investment along with public and foreign investment are the key to boost growth and create job opportunities.
FICCI president Pankaj Patel said that across the board tax rate cuts for businesses and individuals in the Budget for FY19 will help in retaining India’s overall competitive environment globally.
Mr Patel stressed that many key global economies were opting for significant rate cuts — for instance, the US is on the verge of historic tax reform that proposes to cut the corporate tax rate from a top rate of 35 per cent to 20 per cent as well as provide relief to individuals — and this approach should also be followed by India.
He said that although a roadmap for bringing down corporate tax rates to 25 per cent was laid out in earlier Budget, this is not yet implemented across the board.
CII president Shobana Kamineni said corporate tax be brought down to 18 per cent at the earliest with withdrawal of tax incentives and exemptions and withdrawal of surcharges and cesses.
This will send a powerful message to India Inc and global investors that India is an attractive investment destination and will be a huge enabler for job creation, she said.
FICCI president asked about the need to consider the impact of the Dividend Distribution Tax and the Buyback Tax.
“Together with the basic corporate income tax, this pushes India’s overall tax rate for companies well beyond 40 per cent, which is quite high,” he said.
Ms Kamineni said to strengthen the package for the turnaround of the banking sector, the government needs to lower its stake in PSBs to 52 per cent and progressively to 33 per cent. She said the banks may be allowed to reissue the recapitalisation bonds and securitise good loans.