FinMin seeks industry view on US tax reform impact on business

New Delhi, Dec 7 (PTI) Ahead of the Budget, FinanceSecretary Hasmukh Adhia is seeking industry inputs on ways todeal with the impact of sweeping ta...

New Delhi, Dec 7 (PTI) Ahead of the Budget, FinanceSecretary Hasmukh Adhia is seeking industry inputs on ways todeal with the impact of sweeping tax reforms as proposed bythe US and other suggestions to rev up economic growth.

The Donald Trump administration has proposed corporatetax rate cut to as low as 20 per cent from 35 per cent with aview to boosting corporate earnings, a move that could hitIndia's trade and economy.

Adhia, in his meeting with representatives of industrychamber Ficci, also sought its views on steps that could betaken to strengthen the domestic economy in light of thedevelopments in the world's largest economy.

The secretary is likely to hold a similar detaileddiscussion with other chambers and industry bodies.

"We discussed long-term impact of the proposed taxreforms by the Trump administration. If approved, it is goingto have an impact on Indian economy. It will hurt exports ofgoods and services and discourage foreign direct investmentto India," Ficci Secretary General Sanjaya Baru said after themeeting here.

Since American companies will have better opportunity intheir home country, they would refrain from making investmentin other countries, including India, he reasoned.

He also felt that it will have an impact on overallcompetitiveness.

The interaction was part of the pre-Budget consultationand Ficci had a detailed discussion with the financesecretary.

"We see this as a major challenge to Indian economy andthe government should accordingly shape domestic tax policyboth in terms of direct and indirect taxes so as meet thischallenge," he said.

Ficci also requested the government to implement theBudget proposal to reduce tax for all companies to 25 percent.

The Union Budget 2015-16 had proposed lowering the basicrate of corporate tax to 25 per cent, from the current 30 percent over the next four years, accompanied by fewerexemptions. PTI DP CSARD.

This is unedited, unformatted feed from the Press Trust of India wire.

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