Domestic financial institutions and mutual funds today pitched for rationalisation of tax provisions to improve ease of doing business in the country.
Domestic market participants on Wednesday asked the government to restore the rebate on securities transaction tax (STT) to traders, make uniform KYC norms mandatory for financial products and deepen retail participation in the market.
In a meeting called by the finance ministry to get their views on how to further improve ease of doing business, the market participants also sought measures to deepen of the domestic bond market.
“We have asked for restoration of rebate on STT, which was available till 2007-08,” said DK Aggarwal, head of SMC Investments & Advisors Limited. Before it was removed, traders were able to deduct STT paid from their income tax dues on income from securities business. Now, STT paid is allowed as a deductible expense. Removal of the tax benefit has hurt the businesses of traders as it reduced their liquidity, Aggarwal said.
The meeting, which was attended by representatives of revenue department, Sebi and RBI, also discussed integration of various segments of the market.
Economic affairs secretary Shaktikanta Das said the market participants suggestions would be considered by the government. Concerted steps were required by the authorities to increase retail participation in the financial market, said Ashish Kumar Chauhan, Managing Director & Chief Executive Officer of the Bombay Stock Exchange.
The ministry held a similar meeting with foreign portfolio investors on Tuesday.
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