Budget 2023: Avoid higher taxes, extend presumptive tax to service sector

Ahead of the Union Budget on February 1, a panel of experts at Fortune India’s pre-budget roundtable says the government should avoid raising any taxes amid the global uncertainty that may pan out for the whole of the current calendar year. During the panel discussion, Congress party spokesperson Gourav Vallabh called for the introduction of wealth tax and market capitalisation based taxation, especially pointing toward the startups with high valuations who report perennial losses.

Explaining his point of view Vallabh said, “I am a company with a market cap of ₹1 lakh crore, and my top line is ₹1,500 crore and I am in a loss. And I am showing the public that in the next ten years I will be at a loss. I'm showing it to you and I'm not paying any tax. So, don't you think that companies which are having a market cap beyond a particular threshold, should have some tax on the top line than whatever is the top line, 1% tax on the top line. So, it is not for everyone.”

Rahul Garg, Partner, Price Waterhouse & Co LLP, however, pointed out that any tax that arises due to any notional or nominal or artificial value to be recognised, should be shunned away with. Garg also said that he would prefer a taxation that is based on economic profit rather than notional profit.

Sonal Varma, Managing Director & Chief Economist, India and Asia ex-Japan, Nomura, pointed out that the condition is not conducive enough for hike in taxes in the budget given the global uncertainties. The other participants in the roundtable were, Gopal Krishna Agarwal, National Spokesperson for Economic Affairs, BJP; Nadir B. Godrej, Chairman, Godrej Agrovet Ltd. & Godrej Industries Ltd; and Subhash Chandra Garg, Former Finance and Economic Affairs Secretary, Government of India & Chief Policy Advisor, Subhanjali, a think tank.