The government plans to increase the corporate tax rate for listed companies from 20% to 22.5% in FY2024-25, aiming to reduce the tax gap between listed and non-listed companies from 7.5% to 5%. Currently, non-listed companies face a 27.5% tax rate, which is expected to remain unchanged. This adjustment could negatively impact the capital market and discourage companies from listing, warn sector insiders, who suggest raising the tax gap to boost revenue. Finance ministry officials indicate this proposal may be included in the upcoming national budget.
Publicly traded companies issuing shares worth up to 10% of their paid-up capital through IPOs might see their tax rate rise from 22.5% to 25%. Additionally, both listed and non-listed companies using banking channels for large transactions and meeting specific financial thresholds will receive a 2.5% tax reduction. Under this scheme, compliant listed companies will be taxed at 20%, while non-listed ones will face a 25% rate. Conversely, non-compliant companies will be penalized with a 2.5% higher tax rate.
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