Cut in corporate tax rate leads to revenue loss of Rs 1.84L cr in 2 years: The Tribune India


Tribune press service

New Delhi, August 11

The Treasury has lost tax revenue worth nearly Rs 1.84 lakh crore in two fiscal years due to the cut in corporate tax rate announced by the government.

Favorable tax impact

An analysis of the impact of the concessional tax incentive shows that out of the total business income in 2019-20, 1.45 lakh opted for the concessional tax rate involving total income of Rs 9.33 lakh crore under Section 115BAA and 1,244 took the option under Section 115BAB involving a total income of Rs 35.13 crore. Thus, 15.85 percent of companies with 62 percent of total income opted for the new tax regime.

The estimated revenue shortfall due to the decision was Rs 87,835 crore in 2019-20 and 96,400 crore in 2020-21, a parliamentary panel report noted. Figures for 2021-2022 have not been revealed but are estimated at over Rs 1 lakh crore.

There has also been a decline in gross and net tax collection targets at the stage of budget estimates and revised estimates with actual figures even before the announcement of the concessional corporate tax rate. The actual amount was 100.7% above the gross tax collection in 2016-2017 and 101.2% above the net tax collection. But those numbers fell to 98.6% and 97.9%, respectively, in 2017-18. The number of admissions decreased further to 92.5% and 88.7% in 2018-2019. It was 92.9% and 90.1% in 2019-2020.

When announcing the new tax regime, the government said it wanted to establish a globally competitive business environment for certain domestic companies to attract new investment, create jobs and boost economic growth. the economy. The new tax rates are 22% for existing domestic enterprises and 15% for newly incorporated domestic enterprises, which make new investments by March 31, 2023, for manufacturing and production.


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