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Corporate Tax: A brief assessment of some exemptions

Author

Listed:
  • Rao, R. Kavita

    (National Institute of Public Finance and Policy)

  • Tandon, Suranjali

    (National Institute of Public Finance and Policy)

  • Mukherjee, Sacchidananda

    (National Institute of Public Finance and Policy)

Abstract

Government of India proposes to reduce the number of tax incentives built into the corporate tax regime and alongside reduce the statutory tax rate on corporate tax to 25 percent. Beneficiaries of the incentive regime tend to argue that these regimes provide tangible benefits which induce higher level of activity within the economy and hence, phasing these out can be detrimental for the Indian economy. An attempt is made in this paper to briefly assess what can be inferred from available evidence on the effectiveness of the incentive regimes. The focus is on three such schemes, incentives provided for investment in backward areas, incentives for special economic zones and incentives provided for expenditure on research and development.

Suggested Citation

  • Rao, R. Kavita & Tandon, Suranjali & Mukherjee, Sacchidananda, 2016. "Corporate Tax: A brief assessment of some exemptions," Working Papers 16/165, National Institute of Public Finance and Policy.
    • Handle: RePEc:npf:wpaper:16/165
    Note: Working Paper 165, 2016
    as

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    File URL: http://www.nipfp.org.in/media/medialibrary/2016/03/WP_2016_165.pdf
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    References listed on IDEAS

    as
    1. R. Kavita Rao, 2008. "Goods and Services Tax for India," Macroeconomics Working Papers 22976, East Asian Bureau of Economic Research.
    2. Mukherjee, Sacchidananda & Rao, R. Kavita, 2015. "Factors Influencing Unincorporated Enterprises to Register under Value Added Tax (VAT): An Analysis with Enterprises Survey Data," Working Papers 15/145, National Institute of Public Finance and Policy.
    3. Aggarwal, Aradhna, 2010. "Economic impacts of SEZs: Theoretical approaches and analysis of newly notified SEZs in India," MPRA Paper 20902, University Library of Munich, Germany.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Patnaik, Ila & Shah, Ajay & Singh, Nirvikar, 2016. "Foreign Currency Borrowing by Indian Firms: Toward a New Policy Framework," India Policy Forum, National Council of Applied Economic Research, vol. 12(1), pages 139-186.
    2. Mukherjee, Sacchidananda, 2022. "Trends and Patterns of Tax Expenditures on Union Taxes in India," Working Papers 22/380, National Institute of Public Finance and Policy.
    3. Isabelle Joumard & Alastair Thomas & Hermes Morgavi, 2017. "Making income and property taxes more growth-friendly and redistributive in India," OECD Economics Department Working Papers 1389, OECD Publishing.
    4. Chhibber, Ajay, 2016. "Assessing and Evaluating the Addis Ababa Action Agenda (AAAA)," Working Papers 16/166, National Institute of Public Finance and Policy.

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    More about this item

    Keywords

    Area based exemption ; SEZ ; R D ; Corporate tax;
    All these keywords.

    JEL classification:

    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H32 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Firm

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