TV channels are better tax payers: Finmin

Notorious for irritating frequent and long commercial breaks, the television channels are good taxpayers giving to the exchequer more than one-third of their pre-tax profits, much higher than the industry average of about 20%.

The television channels have paid 36.37% of their profit as tax compared to the industry average of 20.60%, said finance ministry's data of the corporate tax paid by 3.28 lakh companies during 2006-07.

The data pointed out that during the year 167 television channels on a profit of Rs 788.9 crore paid Rs 286.9 crore as tax to the government.

The 36.37% tax paid by television channels was only next to forest contractors, security agencies and courier services, which paid 39.33%, 37.80% and 37.64%, respectively, of their profits as tax to the exchequer.

Among others who paid more than 30% of their profit as taxes were chit funds, fashion designers, advertisement agencies and tobacco companies.

According to the finance ministry's analysis the corporates paid 20.60% of their profits as taxes as against the prescribed rate of 30% excluding surcharge and education cess.

The companies take advantage of various tax exemption schemes to reduce their tax liability. The revenue foregone towards corporation tax during 2006-07 was Rs 45,034 crore, which is estimated to increase to Rs 58,655 crore during the current financial year.