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What if there is no tax?
You have worked day and night for that big project for your company and finally its payday. HR hands you your play slip and your mood sinks when the amount of TDS deduction catches your eye. Why?
Why should we pay so much taxes even when government is not able to afford basics facilities to the citizens of the country? Electricity Cut, Potholes, Jammed Traffic and outdated public transport. For god sake let me know where does my tax money goes?
For most of us, taxes are a simple but mind-numbing chore: You dust off your Income tax login, you type the numbers into the little boxes, and a seemingly random number is generated telling you how much you owe or how much you get back.
Benjamin Franklin had said, “In this world nothing can be said to be certain, except death and taxes.”
In other words, while you can’t be sure of anything else in life, no one in this world can escape both death and taxes.
However, what if you were told some day that you are no longer required to pay any income tax as that has been abolished in India? Won’t it be unbelievable? However, what if that actually happens?
With only 3% of the population being taxpayers, and a low Tax to GDP ratio of 9.88%, the question on whether there is a case to abolish income tax is a reasonable one.
In the short run it will put more money into the pocket of the citizenwhich will increase demand, augment investments and boost the economy. The economy will thrive and people will have more spending power as they have more money in their hands.
As India will be no tax zone foreign companies will be flocking to setup factories in India. A much required and easy process to gain market share right ?
Well it is pertinent to note that the government requires huge funds to meet the requirements of the economy, and also to meet its social and economic agenda. Subsidies, infra development, rural development, education programs, healthcare will gradually become a thing of past.
Imagine with no proper roads and transportation will foreign company be willing to setup Industry in India? Cleary No
It should also be kept in mind that the levy of direct tax is the most equitable way to levy taxes since it provides an opportunity to focus on the higher levy of taxes to a select few based on specific criteria.
Well there are a few countries (like UAE, Cayman Islands, Bahamas, Bermuda etc) who do not levy income tax, but the fact is they are cash-rich countries and their economies are much smaller than India. There is no large economy in the world which does not levy income tax.
Thus, while the idea of abolishment of income tax looks attractive in theory, practical implementation has not been tested in the past.
The multi-dollar question is: Can the Indian economy afford such a misadventure?
Published By: akash On 03/31/21 6:41 AM