The report titled "India: Redefining its growth path" observed that the Minimum Alternate Tax (MAT) should be withdrawn and Dividend Distribution Tax (DDT) should be replaced by the witholding tax.
"Following the global trend on lowering of corporate tax rates and maintaing competitivenesss, India should move to a simple tax rate strucutre single corporate tax rate of 25 per cent with no surcharge and cess," it said.
In the Union Budget 2019-2020 presented in July, Finance Minister Nirmala Sitharaman proposed to raise the annual turnover threshold limit from Rs 250 crore to Rs 400 crore for availing a lower corporate tax rate of 25 per cent, thereby, lowering the corporate tax rate of companies earning up to Rs 400 crore from the previous 30 per cent.
The Minister also said recently that the tax rates for companies with over Rs 400 crore turnover will be gradually cut to 25 per cent and the government would support wealth creators.
The KPMG report also said that the tax rate for foreign companies should be correspondingly lowered from the current rate of 40 per cent (plus surcharge and cess).
"It is hoped that the remodelling of the tax structure, through further simplification of the GST structure and promulgating a new Direct Taxes Code, is likely to make the Indian tax system more equitable for all classes of taxpayers.
"There is also the hope that lower tax rates for all corporates and indeed, all taxpayers, along with a fair, rational and even-handed tax administration will help Indan businesses become more competitive in the global space," said Hitesh Gajaria, Head of Tax, KPMG in India.
( With inputs from IANS )