10 pc of total tax from 41 firms corporate tax,FBT

Corporate tax and fringe benefit taxes (FBT) bring a significant contribution to the government,as almost 10 per cent of its revenue collections come from about 41 companies in the country. For every Re 1 of taxes borne by the company it collects Rs 1.8,which indicates that the amount of taxes collected on behalf of the government is greater than the taxes borne by the company,a recent Pricewaterhouse Coopers and Ficci Tax Survey says. Government tax collections in India are dependent on a few large corporate entities which contribute significantly to the Indian governments total receipt of corporate tax and FBT, says the Total Tax Contribution Survey 2008 by Ficci and PwC.

The Total Tax Contribution Survey 2008 collected data from 41 companies out of a total of 100 companies which were invited to participate in the survey. These companies are part of the S&P CNX Nifty and CNX Nifty Junior list,and represent 55 per cent of the total market capitalisation and 54 per cent of the total turnover of the 100 companies identified,and were across various industry sectors. The survey has been conducted for the first time in India using the methodology of PricewaterhouseCoopers global Total Tax Contribution Framework.

The impact of taxation in India is manifested by the average amount of total taxes borne and collected by the 41 participating companies,i.e. 16 per cent of their turnover. This is further substantiated by the average Total Tax Rate (TTR) of the participating companies,which is 35.9 per cent of profit before all business taxes borne. The survey will help support constructive dialogue with the government regarding the future shape and competitiveness of the Indian tax system, said Ketan Dalal,Executive Director,PricewaterhouseCoopers.

The respondents to the Total Tax Contribution Survey 2008 were found to have made a significant contribution to Indian tax revenues,paying nearly Rs 43,049 crore as taxes borne and collected nearly Rs 41,853 crore as taxes on behalf of the government. The survey results showed that the 41 companies contributed 9.7 per cent of total government tax receipts.

Our endeavour is to fully understand the effect of all individual taxes on business to facilitate better management of these taxes, said Dr Amit Mitra,Secretary General,Ficci in New Delhi.