Tax rate must be brought down to global level, says Finance Minister

 The Dollar Business Bureau The tax rate in India must be brought down to the global level while removing the exemptions. The above statement was made by the Finance Minister, Arun Jaitley while delivering the Key Note Address after inaugurating the Thirty First Annual Conference of Principal Chief Commissioners, Principal Director Generals, Chief Commissioners and Director Generals of Income Tax. The Finance Minister also spelt-out his vision of an internationally competitive tax regime with a stable policy and a non-adversarial tax administration. The comments made by the Finance Minister assume lot of significance at a time when you cannot have non-uniform and non-transparent tax regime in place and expect foreign investors to be delighted. Taxation policies in India remain inherently complex – billions of dollars of litigations regarding tax payment by foreign companies is one proof. Corporate tax rates in most nations are in the range of 15 to 25% (as per The Dollar Business Intelligence Unit analysis of KPMG’s Corporate Tax Rate database). In India, the rate is 40% (and we are not talking yet of the complicated indirect tax regime in India)! Compare that to China’s 25%, and you get the drift. Reduction in bureaucracy, regulations and corruption, relaxation in labour laws, a focus on export-oriented manufacturing, creation of high-quality SEZs, direct involvement and accountability of state governments in aiding FDI, etc., are some other areas that need urgent attention, The Dollar Business report added. The Union Finance Minister also exhorted the senior officers of the Income Tax Department to be prompt in redressing the grievances of the tax payers, expand the tax base in a non-intrusive manner even as they strive to achieve the revenue generation targets. He said that the honest tax payers should not be afraid of the Black Money Bill recently passed by the Parliament as it is targeted against those who have stalked their illegal assets abroad. He said that parallel economy has to be squeezed in a free and transparent manner.    

May 26, 2015 | 8:55 pm IST.