Abstract:
Corporate taxes are a significant item for revenue generation of the central government. The government also gives tax sops to improve the performance of company with a view to increase in growth rates and net tax collections. This paper examines the pattern of corporate tax by companies over the years since the beginning of economic reforms. It also examines the patterns by major industry sectors, ownership and size of companies. It is observed that the corporate taxes and profit before taxes have increased year after year. However after the year 2001 the Tax/PBT ratio has been undergoing an unhealthy pattern compared to previous years without any additional/ major tax sops by Government. This study also reveals that the Tax/PBT ratios in various industry sectors, ownerships and size of companies after the year 2001 are not in line with popular perceptions and there is a need to have a closure look in the tax policies to have equitable treatment to all the sectors.
