FM says stimulus pack ‘biggest cheating ever’

Alappuzha: Finance minister T.M. Thomas Isaac on Sunday described the latest stimulus package of Modi government as “the biggest cheating in the Indian history.”

“The stock market skyrocketed as people bought shares in large numbers believing words of finance minister (Nirmala Sitaraman) that the government was going to cut corporate tax from 30 per cent to 22.  But the tax is slashed based on the condition that corporate companies will not seek either exemptions or incentives,” he told a press conference here.

“In 2016, the then finance minister Arun Jaitly had declared that the corporate tax would be slashed from 30 to 25 per cent with no conditions. He had also said that the effective rate avoiding exemptions and incentives will be 24.67 per cent.

“But Ms Seetharaman did cut the effective rate from 24.6 per cent to 22. In reality, the rate cut will be only 2.6 per cent though she keeps bragging that it was 8 per cent.

“The effective tax rate including surcharge and cess will be 25.17 per cent. Effectively, the present tax slab is 0.5 per cent higher than what Mr Jaitly had proposed. However, I don’t accuse them of hiking the tax since I was not sure if Mr Jaitly had included surcharge and cess.

“But it’s absolutely clear that there would be only 2.6 per cent cut in effect including surcharge and cess. That means the corporate companies will get the benefit of half lakh crore rupees.”

Mr Isaac also said that as per the Constitution corporate tax should be shared with states.

“As per the 14th finance commission report, at least 42 per cent of the tax should be shared,” he said. “If you deduct state’s share, the stimulus package will be worth only `29,000 crore.”