Hi Friends,

Even as I launch this today ( my 80th Birthday ), I realize that there is yet so much to say and do. There is just no time to look back, no time to wonder,"Will anyone read these pages?"

With regards,
Hemen Parekh
27 June 2013

Now as I approach my 90th birthday ( 27 June 2023 ) , I invite you to visit my Digital Avatar ( www.hemenparekh.ai ) – and continue chatting with me , even when I am no more here physically

Thursday 17 April 2014

To Be or not To Be ?



Shakespeare would say , " That is the question "


For Federal Reserve Board of Revenue ( Pakistan ) , that question was ,


"  What to publish ?  And what not to publish ? "


It seems , in Pakistan , only 1 million people [ out of a population of 140 million ] , pay income tax


Finally , the Board published the names of those 1 million ( running into a 17,000 page directory ) , with the amount of tax paid by each


To give to Pakistan , a loan of $ 6.7 billion ( approx Rs 41* Thousand * Crores )  , the International Monetary Fund ( IMF ) , insisted on such a publication


Now , in India , we have 40 million people who pay personal income tax ( out of a population of approx 1220 million )


Obviously , for India's Income Tax Department , it would be an impossible task to publish their names in a directory - which could possibly run into 17,000*40 pages  !


Then again , India has no need for an IMF loan , what with its Personal Income Tax revenue amounting to , Rs 2.47*Lakh*Crores


And if the incoming government at the Centre , dares to implement my suggestion of INVERSE TAXATION regime , that revenue could go up 100 times  !


Simply , " Inverse " the tax slabs as follows :


>    Up to  Rs 2 lakhs..................... NIL

>    2.1 - 5.0 lakhs......................   10 %

>    5.1  - 10 lakhs.......................   8 %

>    10.1 - 20 lakhs......................   6 %

>    20.1  - 50 lakhs.....................   5 %

>    50.1 - 100 lakhs.....................  3 %

>    Above 100 lakhs...................... 1 %


What is likely to happen with such " INVERSE  TAXATION  " regime  ?


Following few things :


>  Total personal tax payer base will go up dramatically from current 4
     crores tax-payers


>   Total personal tax collection too , will rise dramatically


>  with this " INVERSE  TAX  REGIME " , there will be no incentive to  evade
    taxes and to generate " BLACK  MONEY  "


>  There will be no resistance to accept ALL payments by cheque / electronic
     clearance  !


 >  The more you disclose as your income , the less you pay by way of taxes
     ( Of course , incrementally  )


>  For a change , we will learn to reward honesty / efficiency / productivity !

    No need to bribe those Income Tax officers  !


>  Lakhs of crores of BLACK MONEY , stashed away in bank
     lockers / gold / land - and , of course those Swiss bank accounts  - will ,
     become " WHITE  MONEY " , overnight  !


>  There will be a huge surge in bank deposits ( - even with , the inevitable
    lower interest rates )


>  Banks will be awash with funds to finance businesses / infrastructure
    projects etc , encouraging entrepreneurs / self-employed to set up new
   businesses ( at 2 % interest rates of loans ) and generate millions of jobs


>  There will be a phenomenal rise in Capital Markets



Only questions are  :


>  To innovate or not  ?



>  To think out-of-the-box or not  ?


>  To feed poor or to teach them how to fish  ?


>  To enable people to earn more or to subsidize their expenditure  ?

  
>  To let people stand on their own legs or continue "Dependency Culture" ?


>  What is possible ?  To reverse the human greed or try and  harness it  ?



*  hemen  parekh  ( 18 April 2014 / Mumbai )




No comments:

Post a Comment