Corporate tax can come down to 25% once exemptions end, says Arun Jaitley

Finance Minister Arun Jaitley said today that corporate tax rate can be brought down to the promised 25% only after all the exemptions given to the industry have ended.

Speaking at a post-Budget meeting, organised by industry body Ficci, he said he had in 2015 promised to cut corporate tax rate to 25%, from 30%, in four years. added however that he had also set a condition — all exemptions would have to go. It would not be proper to end exemptions midway as some industries may have been set up based on them, he said.And therefore, the opportunity to reduce the corporate tax rate to 25% will arise when all the exemptions end in the due course, he said.

In the Union Budget 2018-19, presented last week, Jaitley provided for lower tax rate for corporates with turnover of up to Rs 250 crore. For the remaining 7,000-odd companies, the average effective tax rate after considering the exemptions comes to about 22%, he said. On fiscal deficit, he said the target of trimming it down to 3.2% of the GDP in the current fiscal, ending March 31, was missed largely due to GST revenues accruing only for 11 months as against …read more