In first two years of corporate tax cut, government suffers loss of Rs 1.84 lakh crore – The New Indian Express

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By Express press service

NEW DELHI: The government suffered a revenue loss of Rs 1.84 lakh crore in 2019-20 and 2020-21 due to reduction in corporate tax rates from 2019-20, according to a report by the parliamentary estimates committee. In the first year when the corporate tax rate was reduced, i.e. 2019-2020, the overall loss was Rs 86,835 crore, followed by a loss of Rs 96,400 crore in 2020-21.

Recently, Ministry of Finance sources said that as a result of the 2019 corporation tax cuts, total corporation tax revenue in 2019-20 fell by nearly 16% to Rs 5 .57 lakh crore, up from Rs 6.63 lakh crore in 2018-19.

In 2019-2020, the government announced the reduction of the corporate tax rate from 30% to 22%. The government had also announced a lower rate of 15% for newly incorporated national companies.
According to the parliamentary committee report, almost 16% of companies representing 62% of total income opted for a tax rate of 22% in the first year (2019-20), while 0.14% of companies benefited reduced tax rate of 15%.

The government previously told parliament that the effective tax rate for the whole base of companies reporting profits fell to 22.54% in 2019-20, from 27.81% in the 2018 financial year. -19.

The parliamentary committee was concerned that tax revenue estimates were to be revised downwards by 10% in 2019-20, and recommended that the government carry out a study on the reasons for the decline in revenue collection. In response to this recommendation, the Ministry of Finance has made an estimate of the loss of revenue in corporate tax collection due to the reduction in tax rates.

Recently, with the debate raging over handouts, opposition parties have criticized the government for making “concessions” to corporations while trying to cut subsidies to the poor.

In its defense of the tax rate cut, Finance Ministry officials said corporate tax collections exceeded 2018-19 figures in 2021-22, when corporate tax collections companies had risen to Rs 7.12 lakh crore.

Corporate tax collection increases by 34% in April-July

Corporate income tax collection jumped 34% in the first four months of the current fiscal year which began in April, indicating that a simplified tax regime with low rates is working, the government said. Income Tax Department. The department tweeted about the growth in corporate tax collection in an apparent attempt to counter criticism of corporate tax rate cuts in 2019.

NEW DELHI: The government suffered a revenue loss of Rs 1.84 lakh crore in 2019-20 and 2020-21 due to reduction in corporate tax rates from 2019-20, according to a report by the parliamentary estimates committee. In the first year when the corporate tax rate was reduced, i.e. 2019-2020, the overall loss was Rs 86,835 crore, followed by a loss of Rs 96,400 crore in 2020-21. Recently, Ministry of Finance sources said that as a result of the 2019 corporation tax cuts, total corporation tax revenue in 2019-20 fell by nearly 16% to Rs 5 .57 lakh crore, up from Rs 6.63 lakh crore in 2018-19. In 2019-2020, the government announced the reduction of the corporate tax rate from 30% to 22%. The government had also announced a lower rate of 15% for newly incorporated national companies. According to the parliamentary committee report, almost 16% of companies representing 62% of total income opted for a tax rate of 22% in the first year (2019-20), while 0.14% of companies benefited reduced tax rate of 15%. The government previously told parliament that the effective tax rate for the whole base of companies reporting profits fell to 22.54% in 2019-20, from 27.81% in the 2018 financial year. -19. The parliamentary committee was concerned that tax revenue estimates were to be revised downwards by 10% in 2019-20, and recommended that the government carry out a study on the reasons for the decline in revenue collection. In response to this recommendation, the Ministry of Finance has made an estimate of the loss of revenue in corporate tax collection due to the reduction in tax rates. Recently, with the debate raging over handouts, opposition parties have criticized the government for making “concessions” to corporations while trying to cut subsidies to the poor. In its defense of the tax rate cut, Finance Ministry officials said corporate tax collections exceeded 2018-19 figures in 2021-22, when corporate tax collections companies had risen to Rs 7.12 lakh crore. Corporate tax collection rises 34% in April-July Corporate income tax collection jumped 34% in the first four months of the current fiscal year which began in April, indicating that a simplified tax system with low rates works, the income tax department says. The department tweeted about the growth in corporate tax collection in an apparent attempt to counter criticism of corporate tax rate cuts in 2019.

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