Outlook gloomy for corporate share in direct tax mop-up

Corporate share of net direct tax collections was lower in 2024-25 than in previous years

- SACHIN P MAMPATTA

Companies may foot less of the tax bill for some time yet. The corporate share of net direct tax collections has been lower in 2024-25 than in previous years. The corporate segment accounted for 45.6 per cent of total net direct tax collections as of March 16, compared to 48.1 per cent on the same date in 2023-24 (FY24).

The trend in corporate tax collections has been declining relative to overall tax collections. The share peaked at 67 per cent in 2010-11 but dropped to 46.5 per cent in FY24, according to Department of Revenue figures. This is the lowest in 26 years.

The previous low was 41.5 per cent in 1997-98, coinciding with sizeable tax reforms and a move towards lower rates.