NEW DELHI, Sept. 20 (Xinhua) -- In a bid to boost the country's economy amidst the ongoing slowdown witnessed over the past few weeks, the Indian government on Friday announced reduction in corporate taxes for domestic firms.
In a significant move, the country's Finance Minister Nirmala Sitharaman told media that the corporate tax will be slashed to 22 percent from the existing 30 percent for domestic companies, and 15 percent from 25 percent for new domestic manufacturing companies.
The announcement assumes significance in the wake of the corporate sector's demand to reduce tax which would result in an increase in both the manufacturing and the overall consumption demand, that has witnessed a dip in recent weeks. Besides, it is also expected to boost jobs creation.
In order to attract fresh investment in manufacturing and thereby provide boost to "Make-in-India" initiative of the Indian government, another new provision has been inserted in the Income-tax Act with effect from Financial Year 2019-20, which allows any new domestic company incorporated on or after October 1 this year making fresh investment in manufacturing, an option to pay income-tax at the rate of 15 percent, it said.
Calling this move as "historic," Indian Prime Minister Narendra Modi said it will create jobs in the country.
He tweeted, "The step to cut corporate tax is historic. It will give a great stimulus to Make in India, attract private investment from across the globe, improve the competitiveness of our private sector, create more jobs and result in a win-win for 130 crore Indians."
