Most corporate tax breaks may be phased out in FY18 | Business Standard News

Most corporate tax breaks may be phased out in FY18 | Business Standard News


21, 2015
This refers to the report
“Most corporate tax breaks may be phased out in FY18” (November 21). Instead of
viewing the budget exercise just as another arithmetical jugglery to make both
ends meet, government need to evolve a  prudent ‘Asset Liability Management’ (ALM)
approach in handling government finances. The ‘Take as it comes’ approach to
revenue and ‘Pay as you go’ approach to expenditure which is a legacy of the
pre-independence governments need a quick re-visit. Though government finances
cannot be compared to accounts of banks or companies, if the arrogance of
ownership settles down in the mind as a ‘right to do anything, come what may’,
we may not need an astrologer to predict doom. As history of several nations
has shown, economic development alone cannot sustain long term social security
for the people. Government gets an opportunity to make corrections in the
financial planning exercise every year, if only there is a will to use annual
budget as an instrument for the purpose.
Every year, the Economic
Survey, which is presented just before the budget, gives an overview of
developments affecting the basic features of economic growth and therefore have
implications on subsequent financial management. This year, government could
consider presenting a paper giving indicative information on the resources that
can be tapped for mobilisation of funds for promoting growth and government’s
priorities about their deployment over time. The sectors could include:
Areas including agriculture income, now
enjoying tax concessions.
Tax waivers, including those extended to
corporates, provided during the last 5 or 10 years and the benefits derived. An
attempt should be made to make beneficiaries plough back to the exchequer, a
portion of the benefits they derive out of such concessions. Though this may be
happening in different ways(like employment generation, reduction in exports
etc), there is no transparent and meaningful analyses in these areas.
Real Estate is another grey area. States
and Local Self Government authorities may create an inventory of unutilised built-up
areas, both residential and commercial. A nominal tax on unused/unsold
buildings and commercial space could be thought of. This will improve real
estate market.

G Warrier, Mumbai


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