The government lost a little over Rs 1 lakh crore in 2020-21 on account of a cut in corporate taxes, Minister of State for Finance Pankaj Chaudhary said on Tuesday.
In September 2019, the government announced a cut in base corporate tax for then existing companies to 22% from 30%; and for new manufacturing firms, incorporated after October 1, 2019, to 15% from 25%.
Companies opting for these new tax rates had to forego all exemptions and incentives. The effective tax rate for existing units, after considering surcharges and cess -- such as Swachh Bharat cess and education cess, which are levied on top of the income and corporate tax rates -- is 25.17% as compared to 34.94% earlier. For new units, it is 17.01% as against 29.12% previously.
In a written reply in the Rajya Sabha, Chaudhary had said the estimated revenue loss (due to reduction in corporate tax) in FY 2020-21 has been reestimated to be Rs 100,241 crore.
In February, the Minister had informed Parliament that the revenue loss in 2019-20 fiscal due to reduction in corporate tax rate from 30% to 22% was Rs 1,28,170 crore.
As per the corporate tax collection data shared by Chaudhary, in fiscal 2022-23 the provisional revenues stood at over Rs 8.28 lakh crore, higher than over Rs 7.12 lakh crore in 2021-22.
In 2018-19 and 2019-20 corporate tax collection stood at Rs 6.63 lakh crore and Rs 5.56 lakh crore respectively.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
