New Delhi: Prime Minister Narendra Modi on Friday lauded his government corporate tax cut announcement and called the move historic. Taking to micro-blogging site Twitter, PM Modi said that the ‘announcements in the last few weeks by the Centre clearly showed that they (government) is leaving no stone unturned to make India a better place to do business, improve opportunities for all sections of society & increase prosperity to make India a $5 Trillion economy.’
“The step to cut corporate tax is historic. It will give a great stimulus to Make in India, attract private investment from across the globe, improve competitiveness of our private sector, create more jobs and result in a win-win for 130 crore Indians”, PM Modi tweeted, hours after Finance Minister Nirmala Sitharam announced tax bonanza for corporates.
Union Home Minister Amit Shah also welcomed the move.Shah said that Rationalisation of corporate tax had been a long pending demand, which is now a reality. “This move will make our corporate globally competitive and our markets much more exciting for potential investors”, asserted the Home Minister.
“Modi government is committed to making India a big manufacturing hub and this decision along with previous announcements on relaxing FDI will go a long way in realising this objective. I congratulate PM
Narendra Modi and FM for announcing these bold measures”, tweeted Shah.
Earlier in the day, ahead of the GST council meet, Sitharaman, as part of measures to promote growth and investment, announced to slash corporate tax rate to 22 per cent for domestic companies and 15 per cent for new domestic manufacturing companies, besides other fiscal reliefs.
The effective tax rate for these companies would now be 25.17 per cent, inclusive of surcharge and cess. Also, such companies shall not be required to pay Minimum Alternate Tax (MAT).
The total revenue foregone for the reduction in corporate tax rate and other relief is estimated at Rs 1,45,000 crore. This is the biggest announcement so far by the Modi 2.0 government to fight the slowdown, which dragged down the GDP growth to a six-year low of 5 per cent in the April-June quarter of the current fiscal.