Budget 2022 Latest Update: In the upcoming Budge 2022, the Central government is likely to consider a proposal to offer foreign banks with local branches tax parity with their Indian counterparts. It is believed that the move from the Centre will reduce their tax rates by as much as 15 percentage points to 22%, two government officials told Mint.Also Read - Sensex Sinks Over 1,100 Points in Early Trade; Nifty Near 17K

Giving further updates, the officials added that the Centre is examining the issue and an announcement to this effect will be made in the upcoming budget. They added that the finance ministry is looking at a representation made by some foreign lenders. Also Read - Budget 2022 Documents To Go Green Again This Time, Printing of Copies To Be Minimum

It must be noted that the foreign banks pay higher taxes than domestic banks as corporate tax rate cuts in the past years did not apply to them. The foreign banks can be taxed at a lower rate if they convert their operations into subsidiaries, few of them have chosen to do so. Also Read - Budget 2022: IMF’s Gita Gopinath Expects India To Address Unequal Recovery, Focus On Healthcare, Education

Some of the foreign banks have urged the Central government to treat them at par with Indian banks as they are subject to the same regulations and norms and practise the same method for computation of profits and income.

The government sources further added that the domestic banks have opted for a lower rate option at 22% under the tax laws, but the similar tax rate option is not available to foreign companies which creates significant disparity.

He added that there should be parity in corporate tax rates for branches of foreign companies with domestic companies in line with global practice of corporate tax parity.