September 20, 2019, would be remembered as a watershed moment in the history of Indian economy. This day signifies the relief of about Rs 1.45 lakh crore for the corporate taxpayers.
With the aim of boosting corporate profit growth and encouraging private investment cycle, the government slashed the corporate tax rate to 22 per cent from 30 per cent for existing companies, and to 15 per cent from 25 per cent for new manufacturing companies. Being termed as a mid-year bonanza, the lowered corporate tax rate is expected to give the much-needed stimulus to the economy.
Commenting on the announcements, CII President Vikram Kirloskar said that, cut in corporate tax from 30 per cent to 22 per cent without exemptions has been a long-standing demand of the industry and is an unprecedented and bold move by the government whereas FICCI President Sandip Somany observes that the announcements will give a major boost to the ‘animal spirits’ of corporate India and will reinvigorate the manufacturing sector that has been going through a difficult phase of late.
R K Chugh, President, IEEMA said, “The measures announced will bring Indian companies at par with other countries and would spur growth in exports through higher competitiveness.”
Sumant Sinha, Chairman & MD, ReNew Power, said, “This is a step in the right direction and will bring our rates closer to that in most mature economies. Reasonable tax rates also go a long way in ensuring better compliance.”