Since India holds an advantage of being one of the fastest growing economies in the world, it can afford to keep the corporate tax rates high, Jane McCormick, Global Tax Head at KPMG told CNBC TV18. Global tax rates are coming down to somewhere around 20 percent, 15 percent differential can make a big difference to an investment decision, Jane McCormick said. In the US, tax reforms helped bring down the corporate tax rate to 21 percent from 35 percent, and this is generally happening around the world, she told CNBC TV18. The overall tax rate is not changing much. So, it needs to be made sure that the Indian tax base is protected in comparison to others, she said. “In the US corporate tax deduction was compensated for via loss of other deductions,” Global Tax Head at KPMG said. She also said that India’s business community needs to be little bit patient on the issue of corporate tax rate reduction issue.
Commenting on the budget 2018, Jane McCormick said the Indian budget 2018 offered no big surprises on tax front. The stability that is maintained in terms of tax is a good thing, she told. “In my word people generally think that it is quite good, we like stability, we don’t like a lot of changes happening so the fact that maybe for tax geeks like me it could be characterised as a piece of boring Budget. For businesses probably a good thing,” she said. Considering India is a huge economy with a large informal sector, invoice matching is the right option for it, she advised. She said that
On goods and services tax (GST), she said that it’s needed to keep this indirect tax as simple as possible. GST is moving towards a revenue neutral rate, she added. She also said that countries worldwide are now moving forward on taxing MNCs on digital presence.