Recommending measures to be taken for the IT industry in the upcoming general budget, IT industry’s apex body Nasscom said that the government should frame a tax-friendly policy for Special Economic Zones (SEZ) for a period of 20 years, according to a report of the Indian wire.
The National Association of Software and Services Companies (NASSCOM) has submitted an extensive recommendations document to the Prime Narendra Modi government for their consideration for the upcoming Union Budget, according to the Economic Times.
In a list of recommendations NASSCOM presented to the government, R&D and skilling were the clear focus given the shortage of talent in the industry, and rising need for investment in R&D as companies embark on a digital transformation journey.
“With a requirement to reskill 40 per cent of the country’s four million IT workforce to cope with emerging technologies, it is recommended to incentivise firms by promoting expenditure on developing skills and training programs undertaken by the industry,” the report said.
The industry body has recommended a budget of Rs 500 crore for co-funding talent development and re-skilling in IT services.
Special Economic Zone
“Establishing a tax-friendly Special Economic Zone policy for the next 20 years would help retain existing tax benefits as well as continue to generate employment while increasing foreign exchange earnings,” Nasscom said in a statement.
Along with a tax-friendly Special Economic Zone policy for the next 20 years, Nasscom is looking at incentives for R&D investments in technology, talent development and reskilling.
It also encourages funding for technology startups and easing taxation regime for the digital economy and promoting ease of doing business.
According to the report, NASSCOM has said that measures to promote the creation of intellectual property in ER&D through the incentivisation can create close to 350,000 direct and indirect jobs by nurturing 1,000 technology spin-offs by 2025.
It also suggested that start-ups and small and medium enterprises with a turnover of less than Rs 50 crores also be exempted from minimum alternate tax (MAT).
Ease of doing business and taxation regime for the digital economy and investment in e-waste, are among other recommendations.
NASSCOM has recommended a point-based reward system of e-waste recycling credits to incentivise the formal organisations to channel their e-waste through government-approved recycling centres.
It suggested co-funding incentives to metropolitan city governments to set up new recycling units through public-private partnerships with large e-waste companies.
The partners may be government bodies such as NITI Aayog, Ministry of Electronics and Information Technology and the Central Pollution Control Board to devise a roadmap for a long-term solution for e-waste management, the report added.