Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: Central Excise rule to resale the machines to a new company :: empanelment :: due date for vat payment :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: list of goods taxed at 4% :: TDS :: cpt :: VAT Audit :: VAT RATES :: ACCOUNTING STANDARDS :: TAX RATES - GOODS TAXABLE @ 4% :: form 3cd :: ACCOUNTING STANDARD :: ARTICLES ON INPUT TAX CREDIT IN VAT :: articles on VAT and GST in India
 
 
News Headlines »
 How to file income-tax returns online
 How Income Tax Returns Are Scrutinised
 All About New Income Disclosure Scheme to make Demonetisation successful
 Your deposit may draw income tax notice
 Accepting payment under IDS 2016
 New disclosure scheme could see 50% tax and 4-year limit on cash use for unaccounted deposits
 Pay 50% tax on unaccounted deposits, or 85% if caught, says Modi government
 Deadline to pay property tax in old currency extended
 Cabinet clears amendments to Income Tax Act
 Have you got interest on your income tax refund?
 New income tax rules to curb unaccounted cash

Tax is considerably above the global average
April, 01st 2009

Yes, corporate tax rate in India is considerably above the global average. The average tax rate globally stands at 25.9% in 2008 while that of India stands at 33.9%. This figure includes a 10% surcharge and a 3% education cess. In other words, corporate tax rate in India is almost eight percentage points higher than that of the global average. And this, without adding the impact of Dividend Distribution Tax (DDT) and Fringe Benefits Tax (FBT) levied on corporates.

Furthermore, the global average tax rate has been coming down over the years. In 2006 it was 27.2%, down to 26.8% in 2007. Unfortunately, India has moved in the opposition direction. The DDT was raised from 12.5% to 15%, education cess from 2% to 3% and ESOPS were subjected to FBT. Even for MAT companies, the rate has gone up and its base widened.

Ficci-PwC total tax collection (TTC) survey has revealed that the mean average total tax rate for individual companies is as high as 35.9% of the profits earned before paying any tax (in 2008). In fact, Ficci research indicates that total taxes to PBT account for 46.9% for the manufacturing sector.

Yes, we are aware that the governments figure for real taxes paid by corporates in 2007-08, is only 20.6% of profits. Interestingly, one third of these corporates paid as much as 30-33%. Added to this is the issue that IT companies in the governments own database, pay no corporate tax, thereby, making the 20.6% figure unrealistically low. Further, note that this figure does not include the tax paid in the form of FBT and DDT by Indian corporates.

A look at the tax rates of other countries does reveal that Indian companies are charged higher tax rates. For instance, the corporate tax rate in Bulgaria is 10%, Hong Kong 16.5%, Egypt 20%, China 25%, Netherlands 25.5%, Malaysia 26% and UK 28%. Ficci feels that there is scope for reducing corporate tax rate to around 25%, which will result in larger revenue collections owing to the Laffer Curve effect in India. Whenever tax rates have been reduced in India, the collections have invariably gone up.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - Achievements

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions