Government should bring down the corporate tax rate to 25 per cent, the PHD Chamber of Commerce has suggested.
Besides, the industry body has also demanded that the ceiling of Dividend Distribution Tax and Minimum Alternate Tax be set at 12.5 per cent and 15 per cent respectively in the Budget.
The Chamber submitted its suggestions to the Revenue Secretary Shaktikanta Das on Tuesday during a pre-budget meeting.
PHD Chamber Senior Vice President Alok B Shriram pointed out that presently, the effective corporate tax rate works out to be 33.99 per cent including surcharge and cess.
"This is significantly higher as compared with other developing and developed countries. In addition to this, DDT also imposes a further strain on companies leading to increased outgo towards income taxes thus leaving inadequate funds for generation of internal resources for ploughing back for expansion, modernisation, technology upgradation and R&D," he said.
The corporate tax rate be brought down to 25 per cent to provide a level-playing field and facilitate better tax compliance and optimise business viability, the chamber said.
It has also urged for rationalisation of domestic transfer pricing provisions and as well sought simplification of Section 72A relating to amalgamation and de-mergers and suggested that (corporate social responsibility) CSR expenditure should be allowed as an expense of the corporate.
The chamber also suggested that MAT should be reduced to 15 per cent as it started at 7.5 per cent and has been steadily increased to 18.5 per cent, taking away from the relevant priority sector tax deductions and incentives.
