New Delhi: Prime Minister Narendra Modi on Friday called the corporate tax rate cuts by his government “historic" as it will attract foreign companies to invest in India and create more jobs.
“The steps to cut corporate tax is historic. It will give a great stimulus to #MakeInIndia, 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," Modi tweeted.
On Friday, finance minister Nirmala Sitharaman announced a cut in corporate tax rate for companies that do not avail of any tax incentive to 22%. The effective corporate tax rate after the surcharge will be 25.17%.
New manufacturing companies will have to pay an even lower corporate tax rate of 15%. The effective tax rate for these new companies will be 17.01% inclusive of all surcharge and cess.
“The announcements in the last few weeks clearly demonstrate that our government is leaving no stone unturned to make India a better place to do business, improve opportunities for all sections of society and increase prosperity to make India a $5 trillion economy," Modi said.
Former chief economic adviser in the finance ministry Arvind Virmani tweeted: “One of the most important recommendations of tax economists implemented. This will apply to new companies moving #SupplyChains to India."