Abstract

This study is an attempt to empirically analyse the effect of corporate income tax on investment of manufacturing firms in India during 2005–2019, using the standard static panel model estimation techniques. It is found that the effective corporate tax rate has a negative and significant impact on the corporate investment. Moreover, the estimated effective tax elasticity is relatively low as compared to the magnitude found in other countries. The adverse impact of tax on investment is higher in private firms than in public firms and higher in pre-economic crisis period than in post-crisis period. The effective rate increases with age and size of firms. It is our hope that these results will be useful to policymakers and other stakeholders to take appropriate strategies to design the corporate tax policy such that it will not hinder business investment in India.

摘要

本研究试图使用标准静态面板模型估计技术，实证分析 2005 年至 2019 年期间企业所得税对印度制造企业投资的影响。研究发现，有效企业税率对企业投资有显着负向影响。此外，与其他国家发现的幅度相比，估计的有效税收弹性相对较低。税收对投资的不利影响在私营企业中高于在公共企业中，在经济危机前时期高于在危机后时期。有效利率随着公司年龄和规模的增加而增加。