The Federation of Indian Chambers of Commerce and Industry has called for a reduction in the level of the tax burden on the business sector, including a phased cut in corporation tax.
In its pre-Budget statement, FICCI urged the government to introduced graduated cuts in corporate tax over the next two to three years to a level of 25%, in addition to introducing a lower 20% rate of tax for the nation’s smallest firms. This, the organisation argues, will help to foster economic diversification and growth and encourage voluntary compliance.
FICCI also aimed criticism at the 12.5% dividend distribution tax introduced in the Finance Act 2003 and which the organisation called a form of double taxation.
In view of this, it has suggested that multiple dividend distribution transactions should either be excluded from the levy of additional income-tax on dividends distributed by another company, or a tax credit should be issued for the additional income tax.
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