Assocham for reducing corporate tax to 25 p.c., no MAT

Assocham has recommended reduction in the corporate tax from 30 to 25 per cent. This will result in generating more surpluses in the hands of companies, with the consequential impact on investments and growth.

The chamber said a liberalised taxation regime has been a long-pending demand of the corporate sector.

It said reduction of the corporate tax rate to 25 per cent would bring the tax regime in the country at par with that of developed Western nations and make the country's corporate sector more competitive globally.

It also termed Minimum Alternate Tax (MAT) "redundant" and called for its abolition.
Assocham has suggested abolition of MAT, or alternatively, restricting it to a maximum 15 per cent as against 19.93 per cent, or be levied only on book profits
The chamber said that if at all MAT is to be levied it should be imposed on book profits.

"The book profits can be reduced by the amount of profits redeployed for new investments/new business or transferred to specified reserves. If the same is redeployed for business expansion, this would help the industry redeploy the profits and contribute to the growth of the economy," it said.

MAT is a tax levied on profit-making companies that do not fall under the tax net because of exemptions. With various exemptions phased out over the years, Assocham said MAT has become redundant.