The Hindu : New Delhi News : No further cut in corporate taxes: Minister

Online edition of India's National Newspaper
Wednesday, Mar 07, 2007
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New Delhi

No further cut in corporate taxes: Minister

Special Correspondent

`Government not resorting to price control in cement'

NEW DELHI: Reiterating that the effective corporate tax rate in the country was already very low, Finance Minister P. Chidambaram has ruled out any further cut until the tax exemptions were removed.

In a post-budget interaction with members of the Federation of Indian Chambers of Commerce and Industry (FICCI) here, Mr. Chidambaram said: "[The] effective tax rate is not only moderate, but very moderate... the effective tax rate in India is 19.2 per cent. Show me one Asian country, one ASEAN country which has an effective tax rate of less than 19 per cent."

It was not the scheduled rate but the effective tax rate that mattered, he said. Only when the effective corporate tax rate went up on removal of the existing tax exemptions, would there be scope for further moderation of the tax rates.

On the issue of differential excise on cement as proposed in the budget, he said that the Government was not trying to resort to price control and invited industry players for talks. "We are not reinforcing price control. Government owes responsibility to the people of India to moderate prices where prices seem to have risen unreasonably. "

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