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Corporate tax rate cut may lead to loss in tax rev: Prof Piketty

Professor Parish School of Economics, Thomas Piketty whose book ‘Capital In The 21st Century’ has sold over 2 million copies warned that the Indian government’s decision to cut corporate tax rate to 25% from 30% could be dangerous for India in the long-run.

Speaking to CNBC-TV18’s Ronojoy Banerjee from Jaipur at the literary festival, Piketty said history showed that there is constant pressure on governments to gradually bring down corporate tax rates, which potentially increases the income gap between large corporate houses on one hand and small, medium enterprises on other hand. He also said that with global turmoil and tepid growth, forces of inequality could widen.

He said: “The rule should be that the state capacity and adequate financing of public investment, education etc., the rule must be that everybody should pay fair share in tax and people at the top must pay effective tax rate.

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