Shot in the arm! Mercedes-Benz lauds big step by Nirmala Sitharaman to boost economy

Mercedes-Benz India has welcomed the announcement by Union Finance Minister Nirmala Sitharaman. Martin Schwenk, Managing Director & CEO, Mercedes-Benz India, says, "Reduction in corporate tax to 22 per cent is a shot in the arm as it is directly correlated to economic growth. Reduction of corporate tax has been on the agenda and it will also boost ‘Make in India initiatives."

"It will promote investment, help sustain profitability during challenging times and should also improve buying sentiments, thus helping the auto sector in long term,” Martin Schwenk added.

The reaction from Mercedes came after Modi government on Friday announced a series of tax incentives to boost the industry and restart investment.

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Finance Minister Nirmala Sitharaman announced a lowering of corporate tax rate on domestic companies to 22 per cent subject to such entity not availing any exemptions and incentives. Also these companies will also not be required to pay any Minimum Alternate Tax (MAT). Effective tax rate in this case would be 25.17 per cent, including cess and surcharge.

The Minister announced an even lower 15 per cent corporate tax rate for new domestic companies making fresh investment in manufacturing. These companies should have commenced production on or before March 31, 2023 and would also get exemption from MAT.