Rationalise direct, indirect tax rates to boost consumption: PHD Chamber

Industry body PHDCCI on Wednesday suggested the rationalisation of direct and indirect tax rates to boost consumption in the economy and enhance the tax base. In its pre-Budget recommendations, PHDCCI President Pradeep Multani said refuelling of consumption demand should be the theme of the Budget to have a multiplier effect on production possibilities, private investments and employment creation in the country.

There is also a need to address the high commodity prices and shortages of raw material to support the consumption and private investments, he said.

Basic customs duty should be reduced on raw materials where there is a 100 per cent or more jump in the prices from April 2020, he said.


To give a great momentum to exports, export income should be made tax-free for MSMEs for three years and income of large enterprises from incremental exports (y-o-y) be made tax-free, Multani suggested.

"Lowering the tax rates will increase the tax base and tax-to-GDP ratio. We suggest capping the personal income tax rates flat at 15 per cent with no exemptions. This will enhance the personal disposable income of the individuals," he said.

"The rationalisation of the tax slabs will create tremendous demand in the economy, subside the inflationary pressures and enhance the sentiments of producers for production and create employment opportunities for the growing workforce in the country," he said.