India’s Finance Minister P. Chidambaram has decided to water down proposals to tax certain corporate expenditure and employee fringe benefits after critics of the measure protested that it was too wide in scope.
In its original form, the proposal would have brought a wide range of business spending, such as advertising, consultancy fees and travel and entertainment costs, into the tax net.
However, Chidambaram indicated on Wednesday that he had “no intention” of taxing any legitimate business expense.
"All unintended anomalies that may have crept in while drafting the budget will be removed,” he was quoted as saying.
The Finance Minister has also revealed that he may re-examine an unpopular proposal to place a 0.1% tax on all bank withdrawals of more than R10,000 (US$230) in an effort to curb undeclared money.
"If there is a more acceptable way to tackle the problem of huge cash withdrawals, we will go for it," stated Chidambaram.
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