As we head towards the Budget on July 23rd, data has just been released that gross personal income tax collections amounted to Rs 3.61 lakh crores during April 1-July 1 2024 while gross corporate tax collections were Rs 2.65 lakh crores. This reconfirms and re-establishes the point we have been making for quite some time–that individuals are paying more tax than companies.

When Dr. Manmohan Singh left office, personal income tax was 21% of total tax collections, while corporate tax was 35%. Today, the share of corporate taxes out of total tax collection has dropped sharply to its lowest level in a decade, at just 26%. Meanwhile, the share of personal income tax in total tax collection has shot up to 28%.

Corporate tax rates were slashed on 20 Sept 2019 in the hope that it would trigger a private investment boom. But that has NOT happened. Instead, private investment has collapsed, from a peak of 35% of GDP under Dr. Manmohan Singh, to below 29% during 2014-24. The corporate tax cut has put over Rs. 2 lakh crore in the pockets of billionaires, while the middle class continues to bear the weight of heavy taxation.

~ Jairam Ramesh, MP (RS)