Thought for the day
”From each according to his abilities, to each according to his
needs.”
-
Karl Marx (German, 1818-1883)
Word for the day
Shoat (n)
A young pig.
(Source:
Dictionary.com)
Teaser for the day
We have heard numerous voices raising concern about money
laundered out of India.
Has anybody spoken about the money laundered into India
yet?
The third dimension
An annexure attached to the Union Budget outlines the Revenue
foregone under the Central Tax System during Financial Years 2012-13 and
2013-14. I find this often ignored part of the budget document quite
interesting and to an extent intriguing.
The statement highlights the extent of concentration of
financial power in the hands of few top corporate and the tax disparities
between smaller and larger tax payers. This also raises some doubts about
potential misuse of corporate veil for wrongful purposes.
As the following table shows, about 46% of the sample 6.18.806
companies did not show any profit and therefore did not any tax. The bottom 95%
companies' share in total income was a meager 7.35%. Top 272 companies
accounted for 57% share in total income.
I appreciate that lot of these companies will be shell companies
or holding companies which normally do not have any recurring income.
Nonetheless, the disparities are so stark that it raises many doubts.
On the other hand the effective tax rate for large corporate is
20.97% where as smaller companies pay in excess of 26%. The average for
unincorporated assesses (partnerships, AOP and BOIs) is also over 25%. This to
my mind a reason for examining whether the tax concessions are promoting
disparities or it is just incidental.
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