The proposed reduction of corporate tax rate from 30 percent to 25 percent over four years would make India competitive among ASEAN countries and attract more investments, Revenue Secretary Shaktikanta Das said on Wednesday.
Drawing a comparison, he said the corporate tax rate was 25 percent or less in other ASEAN nations, which were India's main competitors. "The reduction in corporate tax rate is expected to make India competitive, it is expected to make India as an attractive destination for investments, for both domestic and for global investors," he said at an interactive session of CII here.
"With regard to taxation structures we needed to be competitive...India can be competitive only when we move towards a corporate tax of 25 per cent. It is not possible for us to do (it) in a single year," he added. Finance Minister Arun Jaitley in Budget 2015-16 had announced a roadmap for reduction of corporate tax rate to 25 percent in the next four years.
"The gradual reduction in corporate tax rate has to be accompanied by the phasing out of exemptions. Government did not want to take any investor, any industry which have already invested money by surprise. "Advance notice will have to be given.
This is the intention of the Government and from next year onwards the Government will remove the exemptions in a phased manner," he said. "When I say that we are eliminating exemptions, you will agree that bulk of tax litigations are linked to various kinds of incentives or exemptions. So at one stroke we are also eliminating a huge area of tax dispute, tax litigation for the tax payer...," he said.
"The road map for the removal of exemptions will be announced during the course of current year so that industry is sufficiently well prepared and industry has advanced knowledge," he said.
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