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Review MAT, suggests PHDCCI
The phd Chamber of Commerce and Industry (PHDCCI) has suggested that the levy of minimum alternate tax (MAT) should be reviewed and abolished in the forthcoming budget. mat has reduced corporate savings thus compelling postponement of investment plans for modernisation and expansion. It has adversely affected the profitability of exporting companies. It has caused serious repercussions to companies operating at bottom line of profitability, particularly when the interest rates on commercial borrowings are high, says the chamber. This provision has not been included in the working draft of Income Tax Bill 1997, therefore mat needs to be abolished. Further, the chamber also argued that zero tax companies are paying attractive dividends but no corporation tax. With the introduction of tax on distributed profits, this argument has lost validity.