Finance Minister Nirmala Sitharaman To Hold Press Conference At 5 PM Today To Discuss State Of The Economy

Finance Minister Nirmala Sitharaman will be addressing a press conference today (23 August) at 5 pm in New Delhi. The briefing is likely to discuss the state of the economy.

The Finance Minister may address the issue of surcharge on foreign portfolio investors (FPIs). In her maiden Budget proposal, the finance minister had proposed to impose a higher tax surcharge on the super-rich.

Bloomberg reported that government may withdraw the higher tax surcharge on foreign portfolio investors (FPIs).

In the 2019-20 Budget, the government had increased surcharge from 15 per cent to 25 per cent on taxable income between Rs 2 crore and Rs 5 crore, and from 15 per cent to 37 per cent for income above Rs 5 crore. It was also applicable for FPIs operating as trusts or as association of persons.

FPIs expressed concern over proposal of higher tax but the Finance Minister refused to give any relief to FPIs.

Post-Budget, equity markets plunged, with FPIs turning into net sellers and withdrawing Rs 12,419 crore from the market. The FPIs have been demanding a review of the move. Sitharaman then held consultations earlier this month with stakeholders to hear their grievances.

Another likely issue that the FM could address in the briefing could be the submission on the Direct Tax Code (DTC) report.

The Direct Tax Code (DTC) task force, set up to overhaul the 58-year-old Income Tax Act, has reportedly recommended a significant increase in the highest income tax slabs, besides reducing corporate tax rate to an even rate of 25 per cent for both domestic and foreign companies.

Akhilesh Ranjan, Convener of the task force constituted by the Government to draft New Direct Tax Law, submitted the report to Sitharaman in New Delhi yesterday (19 August).

Prime Minister Narendra Modi, while addressing the annual conference of tax officers in September 2017, had observed that the Income-tax Act, 1961, was drafted over 50 years ago and hence needed to be redrafted.

The task force was assigned to draft direct tax laws in line with the norms prevalent in other countries, incorporating international best practices, and keeping in mind the economic needs of the country.

It remains to be seen if the government will also announce other steps to revive economic growth.