Corporate tax could be cut once GST collections improve: FICCI

The government has assured to reduce corporate tax to 25 per cent from 30 per cent once the goods and services tax (GST) collections improve, said industrialists who met Finance Minister Arun Jaitley at North Block on Tuesday.

“The Finance Minister has promised to look at the income tax rates for the corporate sector and lower them once the GST collections improve,” Sandip Somany, President, Federation of Indian Chambers of Commerce and Industry (FICCI), told reporters.

Somany, who led the FICCI delegation, made a presentation to the Finance Minister and other officials on important sectors that the industry body believe should be the focus areas for the next government, as and when it comes to power.

“The cut in corporate tax rates would be progressive. As the GST collections go up, the tax rates could be reduced,” Somany quoted the Finance Minister as saying after the interactive session.

After presenting its report “Agenda for Growth and Shared Prosperity” to the Finance Minister, FICCI highlighted five areas -- agriculture, MSMEs, external trade, digital economy, human capital and productivity -- for the government in the next five years.

“We submitted FICCI’s agenda for growth and inclusiveness for the next government. The concept paper was prepared by FICCI. After the presentation, we discussed several subjects with the Finance Minister, including further growth, taxation, GST revenues, employment generation and social sector schemes,” Somany said.

While the industrialists are concerned about the liquidity crunch and the time it would take to resolve, Somany said the Reserve Bank of India (RBI) is likely to pump in more money to ease the situation, mainly for the non-banking financial companies (NBFCs).

“It depends on how much money the RBI puts into the market. The RBI Governor is responsive and is aware of problems. I am sure he is doing his best to sort out the issues at the earliest,” Somany said.