Revenue loss of Rs 1.84 lakh incurred through tax relief to corporates, alleges Congress
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New Delhi: The Congress on Tuesday questioned the BJP government over corporate tax cut leading to a revenue loss of Rs 1.84 lakh crore and asked why the middle class was charged at peak tax rate of 30 percent against 22 percent for corporates.
Congress spokesperson Gaurav Vallabh told reporters that the Government had claimed that Corporate Tax cut would help increase corporate tax collection but the parliamentary Committee on Estimates said in its report on August 8 that corporate tax cut of 2019 had resulted in a negative "revenue impact" of Rs 1.84 lakh crore.
Vallabh said on September 20, 2019, the Government announced the corporate tax cut from a base rate of 30 percent to 22 percent for existing firms without exemptions/incentives and from 18 percent to 15 percent for new manufacturing units. "What is more important for the Government during a pandemic taking a negative revenue impact of Rs 1.84 lakh crore in two years due to a corporate tax cut (Average Rs 92,000 crore per annum) or increasing the MGNREGA Budget to 2.26 times of the current allocation (Budget Estimate for FY23 in MGNREGA is Rs 73,000 crore)," he asked.
"Why are such rate cuts limited to corporates, why the middle class is taxed at a peak income tax rate of 30 per cent (that too without setting off the expenses) and corporates at 15 percent or 22 percent," he also asked.The Congress leader said after the corporate tax cut a new record was also made when corporate tax collection in 2020-21 was Rs 4,57,719 and fell below income tax collection of Rs 4,87,144 crore.
For 2021-22, the corporate tax cuts may give a revenue loss of more than Rs 1 lakh crore, sufficient for transferring Rs 20,000 per annum per family to the bottom 20 percent of families, Vallabh claimed, asking, "What is more important". Tax cuts given to middle and lower-income groups increase consumption and, as a result, employment, he said.
"Why is the same not explored? Why does 'suit-boot sakaar' hate the middle and lower-income class," he asked.He said this announcement was made exactly two days before the 'Howdy Modi' event organised on September 22, 2019 in Houston, USA and at a time when the finance minister had told states at Goa's GST Council meeting that the Centre had no money to pay GST compensation anymore.
"Why was this corporate tax cut decision taken just before (2 days before) PMs, 'Howdy Modi' event? Was it a mandatory condition for going to the US," Vallabh asked. He cited the 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 during 2021-22 on this account could well be over Rs 1 lakh crore.
(Based on PTI feed)