New Delhi, Dec. 1
THE Federation of Indian Chambers of Commerce and Industry (FICCI) has urged the Finance Ministry to reduce corporate tax rate to about 25 per cent. The chamber also sought a lower rate of 20 per cent for smaller companies.
A FICCI delegation, led by the chamber President, Mr Onkar S. Kanwar, met top Finance Ministry officials here as part of the pre-budget consultations.
At present, domestic companies are liable to income tax at the rate of 30 per cent and foreign companies at 40 per cent. Taking into consideration, surcharge and education cess, the effective rate for domestic companies worked out to 33.66 per cent.
Besides, the chamber has asked for the withdrawal of the fringe benefit tax. It has also suggested that the concept of banking cash transaction tax be abolished.
On research and development expenditure, the chamber has suggested that the existing benefit of weighted tax deduction on expenditure made for this purpose be extended for a period of 10 to 15 years.
On large taxpayer units, FICCI has said that initially the concept should be optional and made mandatory only after 2-3 years of its implementation.
As regards indirect taxes, the chamber has said that while India has to move towards the ASEAN rates of customs duty, any reduction in peak rate of customs duty should be accompanied with internal reforms to ensure competitiveness of domestic industry.