Vallabh said on September 20, 2019 that the government announced the reduction of corporation tax from a base rate of 30% to 22% for existing businesses without exemptions/incentives and from 18% to 15% for new manufacturing units.
“What is most important for the government during a pandemic taking a negative impact on revenue of Rs 1.84 lakh crore in two years due to cut in corporate tax (average of Rs 92,000 crore per annum) or by increasing the budget of MGNREGA to 2.26 times the current allocation (Budget estimate for FY23 in MGNREGA is Rs 73,000 crore),” he said. he asks.
“Why are such rate cuts limited to corporations, why are the middle class taxed at a maximum tax rate of 30% (this too with no expense offset) and corporations at 15% or 22%?” he also asked.
The Congress leader said that after the corporate tax cut, a new record was also reached when the corporate tax collection in 2020-2021 was Rs 4,57,719 and fell in below the income tax collection of Rs 4,87,144 crore.
For 2021-2022, the corporate tax cuts could lead to a revenue loss of more than Rs 1 lakh crore, enough to transfer Rs 20,000 per year per family to the poorest 20% of families, Vallabh said. , asking, “What’s most important”.
Tax cuts for middle and low income groups increase consumption and therefore employment, he said.
“Why is the same not explored? Why does the ‘suit-boot sakaar’ hate the middle class and low-income class,” he asked.
He said the announcement was made exactly two days before the ‘Howdy Modi’ event held on September 22, 2019 in Houston, USA and at a time when the Minister of Finance told the States during the meeting from the Goa GST Council that the Center had no money to pay. plus GST compensation.
“Why was this corporate tax reduction decision taken just before (2 days before) the ‘Howdy Modi’ event? Was it a mandatory requirement to go to the United States,” said Vallabh asked.
He cited revenue loss of Rs 87,835.75 crore in 2019-20 and Rs 96,399.74 crore in 2020-21 and claimed that the estimated loss in 2021-22 on this account may well be more than Rs 1 lakh crore.