Moody's Investors Service on Friday said the government's move to cut corporate tax rate will boost the net income of Indian firms, and is a credit positive move.
“The Government of India's decision to reduce base corporation tax to 22 percent from 30 percent will boost net income of Indian corporates and is credit positive,” said Vikas Halan, senior vice president, corporate finance group, Moody's Investors Service.
He said the extent of final impact on credit profiles of Indian corporates will depend on “whether they utilize the surplus earnings for reinvestment in business, debt reduction or high shareholder returns”.
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