See streamlining of taxes in budget: CII

Excerpts from Bazaar on CNBC-TV18 Watch the full show » Nifty BSE | NSE 10/02/12 Are Mutual Funds betting on Nifty?

Venu Srinivasan, CMD, TVS Motor, Confederation of Indian Industry (CII) President, said he expected streamlining of taxes in this budget. "I expect one level of taxation instead of multiple," he added. He said implementation of goods and services tax (GST) would cut corporate costs. He wanted the government to focus on road development and low cost housing.
Also read: Remove FBT; moderate STT: Chola MF

Here is a verbatim transcript of the exclusive interview with Venu Srinivasan on CNBC-TV18. Also watch the accompanying video.

Q: Your expectations on corporate taxes - every year before the budget we hear talk from industry about how corporate tax trade should be reduced, levies or surcharges should be taken away. Are you realistically expecting something to happen this time?

A: We are only asking for rationalization of taxes without reducing the revenue to the government. We are talking about streamlining simplification and hassle free tax enforcement.   

Q: Any thoughts on whether there will be a dividend distribution tax that will be levied on promoters as well?

A: There is a dividend distribution tax at every level today, except one level they have given relief. But what we are asking is either you tax the dividends at the hands of the shareholder or you make dividend tax at every level tax-free. In other words what I am saying is that dividend distribution tax - if we have three tiers holding by the time it reaches a shareholder you have paid more tax than if it were in the old regime where any pass-through dividend was allowed for tax. So, finally there is only one level of taxation, today there are multiple level of taxation. 

Q: Most people were quite cynical after seeing the economic policy document yesterday but it did talk about issues like scraping (Fringe Benefit Tax) FBT. How likely or unlikely do you see that as happening in the budget?

A: I do see some streamlining of taxation taking place. I think people should not expect the government to have any giveaways in this budget. They have already given a lot in the last few stimulus packages and therefore asking for more giveaways may not be responsible. Therefore, I do hope that things like FBT or wealth tax some of these things will disappear.

Q: Do you think the government will be able to keep on to its (Goods and Services Tax) GST implementation target date?

A: GST implementation target date is April 2010; it may or may not happen in April 2010 on that specified date. But I do see it happening. I think if there is a six-three month delay that's not going to happen to be earthshaking, but its implemented or not it is extremely important to corporate because the transaction cost in the country will come down with implementation of GST.
Continued on next page ...