The corporate tax rate was slashed to 21% from 35% after the US adopted the Tax Cuts and Jobs Act in December, aimed at making businesses invest locally and to incentivise and repatriate profits held abroad. Subramanian said that once GST revenues stabilize, the government will be in a better position to cut corporate tax rates. In his 2015-16 budget, Jaitley had announced the government’s intention to phase out corporate tax exemptions gradually while simultaneously bringing down the corporate tax rate to 25% from the prevailing 30% over the next four years. “There is a case for reducing corporate tax rate to make businesses more competitive as had been announced earlier, subject to revenue considerations. The UK and France are also in the process of gradually cutting corporate tax rates.

Source: Mint January 30, 2018 16:27 UTC