MUMBAI (Xinhua) – Indian companies are seeking a roadmap for convergence of all corporate tax rates to 15 per cent without any exemptions or incentives by April 1, 2023 to boost consumer sentiment and encourage investments, according to Confederation of Indian Industry (CII).
As per the latest Organization for Economic Cooperation and Development (OECD) data, many countries in the world have a corporate tax rate of 15 per cent, such as Canada, Lithuania, Maldives, Mauritius, Oman and Serbia while Ireland, Andorra, Bulgaria, Paraguay and Hungary follow an even lesser rate of corporate taxes, the statement released late Sunday said.
In September last year, India slashed its corporate tax rates to 22 per cent from 30 per cent, which, including surcharge and cess, brought down the effective tax rate to 25.17 per cent from 35 per cent while bringing down the tax rate to 15 per cent from 25 per cent for new manufacturing units.
Terming it as one of the biggest game-changer reforms, the CII statement said that the new rates have catapulted India to a very competitive position against many of the OECD and BRICS countries and neighbouring countries. While the tax cut will reduce the cost of capital and catalyse investment over a period of time, the desired impact on the ground is still far from satisfactory as it has created inequalities on the time of period of starting production.
Hence, in the interest of simplification and uniformity, it is required that all these tax rates be converged over a period of time, the statement said.
In the past three decades, statutory corporate tax rate in India has been brought down from 45 per cent in 1991-92 to 22 per cent in 2019-20.