Road map for removal of tax sops to corporates soon: Revenue Secy

NEW DELHI: Revenue Secretary Shaktikanta Das today said a road map to eliminate all tax exemptions and incentives for corporates would be unveiled in the next 45 days as a precursor to lowering of corporate tax rate to 25% over a four-year period.

Minister of State for Finance Jayant Sinha (C) with Sanjay Nayar, CEO of global alternative investment giant KKR’s India and Gopal Srinivasan, managing director of TVS Capital Funds, during an event organised by IVCA in New Delhi on Wednesday. PTI

Tribune News Service

New Delhi, July 1

Revenue Secretary Shaktikanta Das today said a road map to eliminate all tax exemptions and incentives for corporates would be unveiled in the next 45 days as a precursor to lowering of corporate tax rate to 25% over a four-year period.

“With regard to corporate tax reduction, the Finance Minister in the last Budget has spelt out that it will be reduced from 30% to 25% over the next four years and it will be accompanied by elimination of exemptions and incentives,” he said at an event organised by IVCA here.

“We are now currently working on the removal, elimination of exemptions and incentives and sometime in the next 45 days or so, we will spell out the road map for removal of exemptions and incentives,” the Revenue Secretary said.

It will be put up in the public domain so that the ministry gets the inputs from stakeholders to firm up the proposals, Das said.

Explaining the rationale for the reduction of corporate tax in a phased manner to 25%, Das said the government would have been happy to do it immediately, but there were fiscal issues to attend to.

“The fiscal deficit is sacrosanct and cannot be compromised, so there is the whole issue of affordability in a single year. You cannot reduce the tax from 30% to 25%,” he said.

Taking note of concerns expressed by the Private Equity and Venture Capital Association (IVCA), Minister of State for Finance Jayant Sinha noted that India has all necessary ingredients to become a global investment hub and removal of permanent establishment norms is a huge step forward.

“We want to make sure people who are managing funds in Singapore, Dubai and London are here. We have all the necessary ingredients to become a global investment hub. As far as Permanent Establishment is concerned, that issue is out to rest,” he said.

“You should feel reassured as an investment manager based in India as your tax with respect to those funds is going to be zero,” he added.

The minister said the government was in the process of receiving stakeholder comments on the issue of Permanent Establishment.