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Biocon chief flays govt’s move to remove tax exemption |
BENGALURU: The government's proposal to phase out tax exemptions in some sectors and cancel weighted tax deduction with effect from 2017 in research and SEZ will kill India's biotech sector, Biocon chairperson and managing director, Kiran Mazumdar-Shaw, said.
In a series of tweets, Mazumdar-Shaw expressed her dissatisfactions at the government's proposed plan, adding that the Modi government's aim to make India a preferred investment destination will be negated by those actions.
"(The) proposed phasing out of weighted tax deduction for R&D will kill innovation n see flight of IP n R&D to overseas," she tweeted.
The finance ministry on Friday announced the roadmap for phasing out several exemptions — including reduced benefit of accelerated depreciation in some sectors and end of sops for development of SEZs that are not operational over the next 16 months — from April 2017 as part of its plan to cut the corporation tax rate to 25% from 30%, as announced in the Budget earlier this year.
A discussion paper floated by the government outlined the broad theme and said the plan was to phase out profit-linked, investment-linked and area based deductions for corporate and non-corporate tax payers.
Mazumdar-Shaw added that since there is 60% idle capacity in India, the government's actions will lead to a complete standstill of investments in manufacturing. "You have countries such as Singapore, Malaysia and Indonesia with more efficient tax rates and such policies in India are retrograde," she told TOI.
According to Shaw, the department of industrial policy and promotion (DIPP) has also objected to such proposals. "This is a classic case of bureaucracy hijacking the economic agenda of the country by not consulting even the key government stakeholders," she added.
Source : timesofindia.indiatimes.com
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