India needs single corporate tax rate of 25%, says KPMG

In the 2019 Union Budget, finance minister Nirmala Sitharaman proposed to raise the annual turnover threshold limit from Rs 250 crore to Rs 400 crore for availing a lower corporate tax rate of 25 percent, thereby, lowering the corporate tax rate of companies earning up to Rs 400 crore from the previous 30 percent.

The minister also said recently that the tax rates for companies with over Rs 400 crore turnover will be gradually cut to 25 percent and the government would support wealth creators.

The KPMG report also said that the tax rate for foreign companies should be correspondingly lowered from the current rate of 40 percent (plus surcharge and cess).

"It is hoped that the remodelling of the tax structure, through further simplification of the GST structure and promulgating a new Direct Taxes Code, is likely to make the Indian tax system more equitable for all classes of taxpayers.

"There is also the hope that lower tax rates for all corporates and indeed, all taxpayers, along with a fair, rational and even-handed tax administration will help Indan businesses become more competitive in the global space," said Hitesh Gajaria, head of tax, KPMG India.