Do away with corporate tax surcharges, retrospective tax, says EY
February, 25th 2016
Consulting firm EY has suggested to do away with various surcharges which are currently levied by the government on corporates over and above the 30 per cent corporate tax in the forthcoming Budget.
The idea is to allow corporates to go for more capex and thus benefit the country's economy.
Moreover, EY has advocated for doing away with retrospective tax amendment, particularly in connection with the British telecom major Vodafone.
"Corporate tax, which is currently at 34 per cent including various surcharges, must be made free from any surcharge. If this happens, the corporate tax will obviously come down to 30 per cent.
"It will put more money in the hands of corporates and hopefully, they will be deploying it for capex and thus, in either way it will be beneficial," EY Partner and National Tax Leader Sudhir Kapadia told here today.
The department has issued telecom giant Vodafone a reminder for what it claims to be Rs 14,200-crore capital gains tax dues, and has threatened to seize assets on non payment.
"As far as the pending legacy matter of Vodafone case is concerned, it would be good if the government comes out with a bold step by burying the hatchet once for all, which was created by the previous governments at the Centre, by removing the retrospective tax amendment," he said.
"The previous government was unable to collect the tax from the company in past. Hence, the present government at the Centre will not lose anything if it does away with any kind of retrospective tax amendment. But the positive impact which it will create will be far greater," he said.
Even as the government is looking to have broader consensus on important bills like GST, EY has advised the Modi government to start talking to non-Congress regional parties on GST issue.
"I would expect the government (to) start talking to non-Congress regional parties, as they are the ones which are likely to benefit the most whenever GST is implemented in future," he added.