The Confederation of Indian Industry (CII) has urged the central government to converge multiple corporate tax rates to 15 percent by April 2023 without any exemptions and make the announcement of such a roadmap in the upcoming Budget to facilitate investment decisions.
"The Union Budget could announce a roadmap for convergence of all corporate tax rates to 15 percent, with no exemptions and incentives, by April 1, 2023. A signaling to this effect could help further boost investor sentiment and encourage investments," CII President Vikram Kirloskar said, according to a PTI report.
The industry body feels that the desired impact of the recent reduction in corporate taxes announced by the government on the ground is still from satisfactory. It said that one of the reasons behind this is the multitude of tax rates that create inequalities across the manufacturing and service sectors.
Last year, the finance ministry lowered corporate tax rates to 22 percent plus surcharge and cess. However, those opting for reduced tax rates will not be allowed to avail tax exemptions and incentives from the government.
Further, manufacturing facilities that have started production before 31 March 2023 and incorporated on or after 1 October 2019 would be taxed only 15 percent plus surcharge and cess.
The new rates have put India at a competitive advantage against many OECD (Organisation for Economic Co-operation and Development) and BRICS countries.
The announcement of convergence of all these rates to a single rate of 15 percent by 2023 will provide a line of sight to industry and investors to take decisions now, CII said.