Federation of Indian Chambers of Commerce and Industry (Ficci) has urged the government to come out with a one-time amnesty scheme for those who want to bring back black money stashed abroad in secret bank accounts.
The suggestion was made by Ficci president Harsh Mariwala during pre-budget consultations with finance secretary RS Gujral.
Mariwala said the government could announce the amnesty scheme during the 2012-13 Budget. It would also help the government in improving tax collections and bridging the fiscal deficit.
"We have asked for some broad themes. Make some big announcements to reduce the fiscal deficit. It could be announcement of privatisation of some industries, divestment of some government assets and announcing one-time amnesty scheme to bring back money from outside," Mariwala told journalists after the Ficci delegation's meeting with the finance secretary.
"It is necessary to cast the direct tax net wider and ease the fiscal pressure by privatising coal mines, announcing one-time amnesty scheme to encourage Indians to bring back their overseas wealth and build inventory of government assets other than PSUs, that can be monetised," Mariwala said.
The Ficci team also asked the government to do away with the mandatory requirements of obtaining a Permanent Account Number (PAN) in case of non-residents receiving income on which tax is deductible.
The Ficci delegation included president-elect RV Kanoria, former president Rajan Bharti Mittal and secretary general Rajiv Kumar.
In the last Budget, the government had estimated the fiscal deficit at ` 4,12,817 crore, or 4.6 per cent of gross domestic product (GDP). However, the government has admitted that this target is not likely to be met as the fiscal deficit in the first half of 2011- 12 has already touched Rs 2.8 lakh crore, which constitutes 68 per cent of the budget estimate.
Mariwala said contraction in industrial production and the continuing weak investment sentiment are reminders to the government that it is imperative to use the Budget instrument to initiate new reforms to energise growth.
He said for promoting investments, the instrument of direct taxes could be used effectively.
"Besides, the tax administration needs to be made assessee friendly to improve compliance," Mariwala added.
He said investment allowance should be restored to motivate entrepreneurs to undertake productive investments that otherwise may not materialise.
The Ficci delegation also called for rationalisation of minimum alternate tax ( MAT) from a high of 20 per cent to a more reasonable level. He said units in special economic zones ( SEZs) and SEZ developers as well as investment companies should be outside the MAT ambit.
"We need to expand overall taxpayers in the country. We are not asking for any reduction in excise duties. We asked specifically for investment allowance for R&D," he said.
The Ficci delegation also urged the government to introduce appropriate guidance on pricing of inter-company funding besides strengthening the dispute resolution panel.
On R&D, he said all expenditures related to research, whether involving in- house facility or outside approved facilities, should be eligible for weighted deduction.
Courtesy: Mail Today