The Budget should cut corporate tax rates drastically

Corporate tax rates are likely to be lowered in Budget 2017. The reason being that Union Finance Minister Arun Jaitley had promised during his 2015 Budget speech that corporate tax rates would be reduced from 30 per cent to 25 per cent over the next four years, even as exemptions and deductions would be phased out. 

However, the Confederation of Indian Industry has urged a reduction in the corporate tax rate to 18 per cent. 

There is a catch. The rate of tax actually shelled out by many companies is lower due to a slew of exemptions and tax holidays that they have been enjoying. According to Arun Jaitley, "the effective collection of corporate tax is about 23 per cent". 

Thus, even if the average corporate tax rate comes down to 23 per cent, after all, the exemptions are taken away, that won’t be much of an improvement in the tax rate for a large chunk of corporates, reported Live Mint.