Corporate tax cut put Rs 2 lakh crore in billionaires' pockets, Congress points out

With the personal income tax collections exceeding the corporate tax collections, the Congress on Sunday pointed out that the corporate tax cut has put over Rs 2 lakh crore in the pockets of billionaires, while the middle class continues to bear the weight of heavy taxation.

The opposition party's attack on the government came a day after data released by Central Board of Direct Taxes (CBDT) showed that the net direct tax collection of Rs 5,74,357 crore (as of July 11, 2024) includes Corporation Income Tax at Rs 2,10,274 crore and Personal Income Tax at Rs 3,46,036 crore after excluding the refunds.

Congress general secretary and MP Jairam Ramesh said, "As we head towards the Budget on 23 July, data has just been released that gross personal income tax collections amounted to Rs 3.61 lakh crores during April 1-July 1 2024 while gross corporate tax collections were Rs 2.65 lakh crores."

"This reconfirms and re-establishes the point we have been making for quite some time--that individuals are paying more tax than companies," Ramesh said in a post on X.

"When Dr. Manmohan Singh left office, personal income tax was 21% of total tax collections, while corporate tax was 35%. Today, the share of corporate taxes out of total tax collection has dropped sharply to its lowest level in a decade, at just 26%," he said.

Meanwhile, the share of personal income tax in total tax collection has shot up to 28 per cent, he added.

Ramesh pointed out that corporate tax rates were slashed on 20 September 2019 in the hope that it would trigger a private investment boom.

"But that has NOT happened. Instead, private investment has collapsed, from a peak of 35% of GDP under Dr. Manmohan Singh, to below 29% during 2014-24," he said.

"The corporate tax cut has put over Rs 2 lakh crore in the pockets of billionaires, while the middle class continues to bear the weight of heavy taxation," Ramesh alleged.

Union Finance Minister Nirmala Sitharaman is scheduled to present the Budget for 2024-25 in the Lok Sabha on July 23.