Tribune News Service
New Delhi, August 11
The Central exchequer has lost tax revenue worth nearly Rs 1.84 lakh-crore in two financial years due to lower rate of corporate tax announced by the government.
The estimated shortfall due to this move was Rs 87,835 crore in 2019-20 and 96,400 crore in 2020-21, noted a report by a Parliamentary panel. The figures for 2021-22 have not been revealed but are estimated to be over Rs 1 lakh-crore.
There has also been a decline in the targets of gross and net tax collections at the BE and RE stages with actual even before the concessional tax rate for corporate was announced. The actual were at a healthy 100.7 per cent above the gross tax collection in 2016-17 and 101.2 per cent above the net tax collection. But these figures declined to 98.6 per cent and 97.9 per cent, respectively, in 2017-18. The intake declined further to 92.5 per cent and 88.7 per cent in 2018-19. It was 92.9 per cent and 90.1 per cent in 2019-20.
While announcing the new tax regime, the government had said it wanted to establish a globally competitive business environment for certain domestic companies to attract fresh investment, create employment and give an impetus to the economy. The new tax rates are 22 per cent for existing domestic companies and 15 per cent for newly incorporated domestic companies which make fresh investment by March 31, 2023, for manufacturing and production.
An analysis of the impact of the concessional tax incentive shows that out of total corporate returns of income in 2019-20, 1.45 lakh opted for the concessional tax rate involving a total income of Rs. 9.33 lakh-crore under Section 115BAA and 1,244 have taken the option under Section 115BAB involving a total income of Rs. 35.13 crore. Thus 15.85 per cent of companies having 62 per cent of the total income have opted for the new tax scheme, noted the committee.
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