New Delhi: Expecting the Union Budget to herald a non-adversarial taxation regime, industry body FICCI on Monday said that the government should delink the tax officials' performance appraisal from the tax collection targets. FICCI also said that Finance Minister Arun Jaitley should rationalise subsidies and allocate more funds towards infrastructure to attract investments and create jobs.
"A key factor affecting investor sentiment is the tax environment. While the government has announced some measures to improve the tax environment, a few critical issues still need to be addressed. Ficci hopes that the Budget will create a genuine non-adversarial and conducive tax environment.
"Revenue estimates have to be set realistically and performance appraisals of tax officials should not be based on targets," the industry body said. Jaitley will present the Narendra Modi-led Government's first full Budget on February 28.
Pitching for a "growth-oriented" Budget, the chamber said the government should lower its stake in state-owned banks to 26 per cent to help them raise capital to undertake expansion and widen the tax base to boost revenues. The report of Expenditure Management Commission is expected to lay out a roadmap for rationalisation of subsidies and curtailing non-productive expenditure.
"We hope these (steps) will be earnestly taken up in the Budget. This will also enable greater allocation to productive capital expenditure like infrastructure, which will have a positive effect on economic growth and development. "We look forward to greater allocation of funds in roads, highways, railways, freight corridors, inland waterways, ports and also for improvements in rural and civic infrastructure. This will facilitate acceleration of other economic activities, attract more private investments and create large scale job opportunities," Ficci said.
The chamber said the Budget should focus on reigniting the domestic capital expenditure cycle and ensure fiscal discipline, especially by lowering revenue deficit. "Passage of Goods & Services Tax (GST) Bill, correction of inverted duty structures, reduction of basic rate of Minimum Alternate Tax (MAT), and deferment of General Anti-Avoidance Rules (GAAR) will enhance the confidence of investors. Additionally, some tax relief to individuals will improve disposable incomes, boost consumer sentiment, thus driving demand," Ficci said.
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