As it’s time for new budget, organization and individual are expecting an immense change in the structure of taxation.A survey by Economic stated in the parliament mentioned that 50% increase was observed in goods and GST last July.
Economists have traditionally remained divided on whether tax rate cuts necessarily result in increase in investments.
Like Britain and Japan, the US also proposes to move to a ‘territorial’ basis of taxation whereby a US corporation will not be subject to any tax on its capital gains and income from investments in foreign subsidiaries.
The present US taxes are being touted as the most significant in the last 30 years. The highlight is the deep cut in corporate tax rate from 35% to 21%. This comes with the streamlining and elimination of some incentives and deductions, as well as measures like making payments to non-US related parties subject to tax disallowances.
Many participants expect the markets to rise further in the new financial year but don’t expect 2017-like returns. Of the 21 people polled, 14 felt that the markets would continue their bull run, albeit, the returns would not match those seen in 2017.
The government is expected to spend to ensure robust GDP growth, but most investors expect Budget 2018 to be prudent as loosening fiscal deficit target by too much would spark a sell-off in the bond market.