There will be no further reduction in the corporate tax rates in the forthcoming budget, said revenue secretary N K Singh at the All India Income Tax and Company Law conference held in the capital yesterday.
Singh said that revenue generated from customs duty had fallen short of the target set and attributed this partly to the turmoil in South-East Asia.
He argued that this crisis had made it difficult for the alignment of customs tariffs as had been envisaged. The finance ministry had expected to align these tariffs by the year 2000.
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The revenue secretary said that the weighted average growth rate in customs collections could be down by a range of 4-5 per cent during the current year.
Corporate tax collections, however, were on target, said Singh, although he declined to give any figures on the same. He said the rates of corporate tax at 35 per cent was more or less in alignment with some of the developed countries and there was no further scope for any reduction immediately.
Singh said there was a gap between the number of companies registered with the Registrar of Companies and the Central Board of Direct Taxes. The government was trying to rationalise the list and improve corporate tax compliance, he added.
On personal income taxes, he said, despite the reduction in rates, revenue collections were in line with the projections made by the finance ministry in the 1997-98 budget.
He also ruled out any further reduction in these rates in the immediate future. Instead, he said, the tax of trading (service tax) experiment was very successful and demonstrated that moderate taxes lead to a virtuous cycle.
The government would now concentrate on enlarging the tax net. He said the coverage of the permanent account numbers would be extended to the rest of the country and eventually usher in a regime of self assessment.
Referring to the Voluntary Disclosure of Income Scheme, he said disclosures had so far been along expected lines.
However, he added, with 36 more days left for the conclusion of the scheme, expectations were high irrespective of the political turmoil in the country. He said such disclosures would be kept confidential.
On the introduction of value added tax, Singh said the government was trying to evolve a national VAT. He added that the uniform excise rate of 18 per cent was part of this exercise.
He said the ministry was also trying to evolve a uniform Stamp Duty Act and a common central sales tax and more attention was being devoted to federal tax reforms.