Question

Why corporate tax is included in National income ?

Answer 1

Dear student,

Corporate tax is a part of profits in operating surplus. It can be separately added (with dividends, retained earnings) only when profits are not given. Hence, it is not separately and directly added to national income as it is mere transfer payment from the firms to government.
NDP_FC = Compensation of employees + Operating Surplus + Mixed income of self employed
Where,
Operating Surplus= Rent + Royalty + Interest + Profits
Profits = Dividend + Retained earning + Corporate tax

Regards