The Shoe Is Pinching

How long will it take for the government to phase out corporate tax exemptions?

By JOE C. MATHEW

FM ARUN JAITLEY HAD EXPRESSED A DESIRE TO PHASE OUT TAX INCENTIVES WHILE SIMULTANEOUSLY LOWERING THE EFFECTIVE RATE OF CORPORATE TAXES Prime Minister Narendra Modi was merely stating the obvious. At a recent function in Delhi, he expressed his discomfort over the practice of giving away 62,000 crore annually as tax incentives to corporate India. His government’s stand on such forgone revenue was well known much before this observation. The difficulty in continuing with several tax incentives – 32 of them contributed to a revenue loss of `62,398 crore in the previous financial year – was highlighted by Finance Minister Arun Jaitley during his budget speech last year. Jaitley had expressed a desire to phase out these tax incentives while simultaneously lowering the effective rate of corporate taxes from 30 per cent…

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Business Today (Digital) - 1 Issue, February 28, 2016

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