The government lost a little over Rs 1 trn in 2020-21 on account of a cut in corporate taxes, Minister of State for Finance Pankaj Chaudhary said
New Delhi, NFAPost: 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.
In September 2019, the government announced a cut in base corporate tax for then existing companies to 22 per cent 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 per cent 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.
Agencies
