Budget 2019 expectations: Demand for a reduction in corporate tax grows, will Nirmala Sitharaman oblige?
The corporate world has raised its demand to reduce corporate tax from the existing 30 per cent to nearly 20 per cent.
To sustain start-ups, especially SMEs — who mainly work as vendors to the giant corporate houses — the corporate world has raised its demand to reduce corporate tax from existing 30 per cent to the tune of near 20 per cent. The industry insiders are of the opinion that simplification of the corporate tax is one of the most sought demands that needs urgent redressal by the Modi 2.0 government in upcoming budget 2019 that is going to be presented in the Parliament on July 5th.
Speaking on demand for corporate tax reduction in the Union Budget 2019 Vikram Kirloskar, President at CII told, "Simplification of the corporate tax is one of the most sought demands of the Indian corporates. The corporate tax should not be more than 18 to 20 per cent along with zero exemption limit." He also advised the first lady finance minister of Indian for the waiver in equity investment as an investment in the industrial sector would become more helping attract FDI and change the behaviour of the whole system.
Swati Bhargava, Co-Founder at CashKaro said, "First and foremost, we hope to see a reduction in corporate tax rates from the current 30 per cent to around 20 per cent and the tax slabs for technology products and services to be reduced to around 12 per cent to 15 per cent. We also hope that Angel tax will be abolished for Government recognised start-ups in the upcoming budget. This is crucial for the sustenance of start-ups, especially SMEs. The relaxation of regulatory norms and compliances and the introduction of a single window clearance for start-ups would make the process more efficient."
Bhargava went on to add that she also hopes the government introduces policies that offer more support to the start-up community. India is currently the melting pot of brilliant ideas and concepts which makes a start-up friendly budget the need of the hour. Some good examples to follow are countries like Singapore that work actively towards benefiting start-ups by reducing corporate taxes, relaxing compliances, reducing the rate of TDS and keeping paperwork investor friendly. In the same vein, others like the UK offer tax relief to angel investors for investing in start-ups via schemes like EIS.
"It would also be nice to see the government making provisions to have more women in the workforce with adequate safety measures and infrastructural support in place. Having additional provisions like access to business loans at a competent rate of interest and special investment schemes for companies solely founded and managed by women founders will go a long way in creating gender diversity in the ecosystem," said Bhargava.
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