Corporation tax cut: Govt weighs hit to exchequer

There were corporate tax cuts only for small businesses announced in the 2016-17 and 2017-18 Budgets

The finance ministry is assessing the fiscal cost of reducing corporation tax from the current 30 per cent in Budget 2018-19, as promised by the government three years ago.

Any such move will be contingent upon the goods and service tax (GST) proceeds this year and projections for next year, say officials.

In the 2015-16 Budget, Jaitley had promised a reduction in corporation tax rate from 30 per cent to 25 per cent in four years.

According to internal finance ministry calculations, any reduction to 25 per cent would result in a hit of Rs 70,000-80,000 crore to the exchequer.