The corporate tax rate cut announced in September has started showing its impact. The latest data shows that the government has collected only Rs 15,846 crore corporate tax in November, almost 25 per cent lower than Rs 20,864 crore in November 2018.
The monthly account of the Centre, released today, also shows that the corporate tax collection till November is lower than that in the same period last year. So far, the government has collected Rs 2,88,602 crore in the April-November 2019 period compared to Rs 2,91,254 in the same period last year.
The government reduced the corporate tax rates from 30 per cent to 22 per cent in September this year, bringing down the effective tax rate to 25.17 per cent from 35 per cent earlier. For new manufacturing companies, the tax rate was reduced to 15 per cent from 25 per cent. The effective tax rate after surcharges and cess will be 17 per cent.
According to the government, it would lose around Rs 1.45 lakh crore annually due to corporate tax rate cut. The government has budgeted for Rs 7.66 lakh crore corporate tax collection in the current financial year, which is 15.5 per cent more than the provisional collection over the last financial year.
The monthly account of the government also showed that overall tax collection till November has been Rs 7.5 lakh crore, 45.5 per cent of the budgeted target of Rs 16.5 lakh crore. Last year till November, the government had achieved almost 50 per cent of the budgeted target. The overall revenue collection has been Rs 9.83 lakh crore, almost 50 per cent of the budgeted target of Rs 19.62 lakh crore.
The overall fiscal deficit until November 2019 was Rs 8.08 lakh crore, 115 per cent of the budgeted target of Rs 7.04 lakh crore.