Budget 2013: Higher taxes on super rich will affect biz sentiment, says Assocham

Budget 2013: Higher taxes on super rich will affect biz sentiment, says Assocham New Delhi: Industry chamber Assocham Sunday said any move to impose higher taxes on super rich will hit business sentiment amidst economic slowdown.

The government should focus more on high growth as the higher levy on super rich could affect the investors' sentiment, a survey has said.

"The focus and public debate should shift from 'more tax on super rich' to 'super growth'," Assocham said in a survey.

To reduce fiscal deficit and economic inequalities, majority of the companies surveyed by the chamber said the government's emphasis should be on better tax administration, reduction in non-plan public expenditure and improvement in quality of governance.

"The industry expects Finance Minister P Chidambaram to give a growth-oriented Budget which would promote investment and revival of the economic sentiment," Assocham President Rajkumar Dhoot said.

The chamber claimed it has surveyed about 85 CEOs and senior executives across different sectors including finance, manufacturing, IT and ITeS in various cities.

The survey stated that as many as 61 percent of the respondents said that, if in case, the higher taxes on super rich are levied, it will affect the business sentiment of companies since it would act as a disincentive on wealth and value creation.

However, remaining companies felt that they can live with the tax on rich as long as it is a short-term levy in the form of a surcharge for one or two years at the most, it said.

The chamber said profit-making and wealth creation are essential attributes of a business enterprise.

"We need not stifle these attributes just because the economy is facing bad times. There are several other ways to return to the fiscal prudence such as cutting the wasteful expenditure and leakages in targeted subsidies," Assocham Secretary General D S Rawat said.

PTI