The task force on the Direct Tax Code (DTC), headed by Central Board of Direct Taxes (CBDT) member Akhilesh Ranjan, has also recommended removal of surcharge on incomes.
In a bid boost revenue, both the UPA and NDA governments have resorted to the practice of imposing surcharges on incomes of individuals or companies.
Finance Minister Nirmala Sitharaman, who presented her first Budget last month, had announced slashing of corporate tax rate to 25 per cent but only for companies with annual turnover of up to Rs 400 crore. She had also indicated that corporate tax rates for companies with higher turnovers would be gradually reduced.
If the centre decides to accept the recommendations of the task force on DTC, companies could also be exempted from paying taxes on the dividend they earn.
The exhaustive report, spread in two volumes and based on incorporation of international best practices, was submitted to Sitharaman on Monday.
A senior Finance Ministry official said that the recommendations will be examined before taking a final decision. The content of the report is yet to made public.
Sources, however, said that the panel has strongly recommended the need to make tax policies more predictable for companies.
"The government is of the view that the tax rates must be lowered to ensure compliance... we will look into the issue and take a decision on what is to be done," the official said.
Simplification of tax filing procedure and implementation of measures to reduce tax litigations are also part of the report.
The committee has argued against any surcharge on income and has suggested that even if it is levied, it should be temporary in nature.
( With inputs from IANS )