The apex auditor CAG has said that public sector companies are better taxpayers than private sector firms.
"The effective rate of tax of public sector companies is 25.7 per cent in 2007-08 against 21.3 per cent of private companies," Comptroller and Auditor General said in its report tabled in Parliament recently.
Effective tax rate is the portion of profits which companies pay as corporate tax after seeking exemptions, as against the statutory tax rate of 33.9 per cent.
The CAG has also asked the finance ministry to look into the difference between the percentage of taxes being paid by PSUs and private sector companies.
The report said that the private sector enjoys larger tax concessions from the government compared to the public sector peers.
"The gap of effective rate of taxation between the private sector and public sector undertakings need to be reviewed at the board level," the CAG said.
The apex auditor said in its report that large companies avail more tax concessions than the smaller ones.
Companies with profit before tax (PBT) of Rs 500 crore (Rs 5 billion) and above had an effective tax rate of 21.9 per cent, while the same was 24.1 per cent for companies having PBT of up to Rs 1 crore (Rs 10 million), it said.
Besides, the report also noted that three states -- Delhi, Karnataka and Maharashtra -- together accounted for 75 per cent of the total direct tax collection in 2008-09, higher than 66 per cent registered in the previous year.
While Karnataka saw a 9.2 per cent buoyancy in tax collection, Delhi registered a 23 per cent decline in collection in 2008-09 over the previous.
The growth in collection was unevenly spread across the country, with only 7 states showing a positive growth in tax collection in 2008-09.
The seven states which saw a collection growth are Arunachal Pradesh, Karnataka, Maharashtra, Tripura, West Bengal, Andaman and Nicobar Islands and Puducherry.
