Chances for reduction in corporate tax look bleak: Survey

NEW DELHI: The Budget 2009-10 may provide tax incentives for the exporters but there may not be a cut in corporate tax, Assocham said.

While two-third of corporates are expecting tax sops for the exporters hit by demand slowdown in the key markets of the US and the Europe, "67 per cent of them stated that chances for across-the-board reduction in corporate tax look bleak", the Assocham survey said.

At present, the corporate tax is 30 per cent plus cess and surcharges.

Assocham further said majority of the 300 CEOs surveyed expect the Budget to set the stage for economic reforms.

Over 80 per cent of them believe that curtailing the fiscal deficit would top the Finance Minister's agenda.

"The corporate sector is expecting a growth-oriented Budget while also targeting the steeply rising fiscal deficit," the survey said.

At the same time there is a fear among them about the possible roll back of the excise duty cut as part of the government's clamp down on fiscal deficit, it said. The government had slashed excise duty in the stimulus packages.

As per the pre-Budget Economic Survey the fiscal deficit to GDP ratio stands at 6.2 per cent.

Assocham said the industry is expecting the Budget to lay greater stress on infrastructure development with higher allocations and fiscal benefits.

Majority of the business heads expect higher budget for the social sector including education and health while over 92 per cent stated the government would set higher outlays for programmes oriented towards the rural India.

The Budget is also expected to provide relief to the salaried class by increasing the income tax slabs or reintroduction of the standard deduction in order to boost consumption demand in the economy, the survey said.