Budget 2019- Why MAT Removal is Good for Indian Economy?

After gaining the power once again, the BJP led government, is soon to revive the investor sentiment and boost the Indian economy by abolishing MAT. If reports are to be believed the industry body FICCI has on Friday has suggested the finance minister Nirmala Sitharaman, various measures to arrest the economic slowdown.

The representative of Industry chambers has made the recommendations prior to budget implementation to bring down the dividend distribution tax to 10% from the present 20%, and phase out MAT to avoid complexities arising from the new accounting norms, there is a need to review the concept.

The Finance Minister, Smt Nirmala Sitharaman @nsitharaman holds Second Pre-Budget Consultation with the Representatives of Industry, Services and Trade Groups; For full details, please log on to: https://t.co/ECDECTQwMX@nsitharamanoffc

— Ministry of Finance (@FinMinIndia) June 11, 2019

MAT Cut Benefits to Indian Economy

The MAT cut would directly benefit Indian companies.  It would improve the country’s business climate and will make governance more efficient and effective. The country has considerably improving its ranking in Doing Business Report as per the World Bank and this step will further trigger the growth.

Moreover, with the launch of GST and other trade laws, the implications of MAT have become more complex. Right now, the Indian businesses are bearing high tax rate and corporate rate and dividend distribution tax have pushed India’s overall tax rate beyond 50% and the abolition of the tax would boost the Indian economy.

Apart from that, the industry representatives have made several suggestions with respect to land reforms, simplification of tax, generate employment, incentives for start-ups, tapping the potential in the tourism sector.

The simplified taxation regime is pivotal in increasing the revenue flows and it will help the government to achieve the fiscal target.

Full Budget 2019

The government has already presented the interim budget for 2019-20 and full-fledged budget is likely to be announced on 5^th July.

In the end, we would like to conclude that these measures would spur the growth and will pave way for new investments.