Budget 2022-23: More Reforms Needed in Tax and Policy Stability

The tax takes center stage for corporate India’s budget expectations. And below are the highlights that have been pitched to continue the reforms while ensuring tax and policy stability in the upcoming budget.

Simplification in tax deduction and tax collection at source TDS and TCS for more clarity in corporate India.
Undercover uncertainties of the pandemic are still not out and have impacted some industries on a significant level. So the government is required to support the travel, hospitality and manufacturing industries.
In this budget, the government has imposed ease of taxation for the startups; thus, they are attracting FDI and foreign inflows.
There is a demand for simplification of tax rates on dividends. This time, industries demand tax rates on dividends for residents to be equal with non-residents.
The government also took several steps on dispute resolution on tax.
Budget 2022-23 also talks about equalization and global digital taxation standards.
The forthcoming budget seeks significant economic presence prohibitions that the new-age companies and corporations must be looking forward to.

On December 16, the virtual pre-budget consultation was held with Finance Minister Nirmala Sitharaman. The industry chambers stated that the government would help settle the emerging signs of recovery that are seen presently in private investment.

Also, CII (The Confederation of Indian Industry) president TV Narendran stated that the government’s capital expenditure on the increased infrastructure would soon continue to support growth in the meantime.

Whilst at the meeting, PHD Chamber demanded the expansion of relaxation concerning PBG (Performance Bank Guarantee) and EDM (Earnest Money Deposit) one more year.

Underlining the importance of coming pandemic preparedness, which will help reduce further risks to growth, Narendran stated, “With the risk of Omicron variant spread, it is important to explore booster doses for COVID with the decent provisioning in the budget for sustained enhancement of our surveillance, vaccine research, therapeutics, testing, and healthcare infrastructure.”

Whilst the meeting with the representatives of the capital markets and financial sector, the FIDC (Finance Industry Development Council) suggested bringing some ‘flexibility’ element in case of retail loans that have been provided to individuals or small businesses.

According to FIDC, SIDI is one of the best institution choices to refinance facilities to NBFCs for onward loan to MSMEs and other associated sectors. The Finance Ministry said the two consultations with diverse stakeholder groups would be held virtually.