Reduce MAT to 25.6 percent: FICCI

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SME Times News Bureau | 08 Mar, 2010
A 3 percent hike in the Minimum Alternate Tax (MAT) in Budget 2011 over weighed the concessions in the corporate tax and the government should look at reducing the peak rate to 25.6 percent from over 30 percent now, said an Apex industry chamber on Sunday.

"They (the government) have reduced the surcharge (on corporate tax) but increased MAT. It is a disappointment for the industry," the Federation of Indian Chamber of Commerce and Industry (FICCI) President Rajan Mittal said.

The Budget proposals announced last month, raised MAT to 18 percent from 15 percent, and cut surcharge on corporate tax to 7.5 per cent from 10 per cent.

".....the figure is 25.6 per cent. India should start considering to look at the same tax rate over a period of time....It would be more in line with international standards," Mittal added.

The FICCI President also said the Budget could have hiked the FDI limit in the insurance sector to 49 percent from 26 percent at present and opened up the multi-brand retail sector.

The government could have also extended more tax benefits for investments in sectors like agriculture, food processing and cold chains, he added.

Industry expects a more liberalised regime and better growth in 2010-11, Mittal said.