Listen to the Lone Voice !

If you do not count late eminent legal luminary Nani Palkhiwala , Anil Bokil of Arth Kranti , and myself , then Subramaniam Swamy’s is the lone voice , recommending  total abolition of Personal Income tax

Here is what he said recently in the World Hindu Economic Forum yesterday :

Must abolish income-tax, says swamy 

Highlights:

#  Subramanian Swamy advocated the scrapping of unnecessary taxes and abolition of

    income-tax

#  “We have got such complicated taxes that people don’t even know most of them.

    Income-tax should be abolished as it is the most unbalanced tax in this country,” he said

And Anil Bokil’s proposal is quite similar but goes further and spells out how to re-write the entire system of taxation 

As far as I am concerned, I must have sent to the Cabinet Ministers , 20+ emails , pointing out how this abolition would :

Ø    Reduce corruption / black money

Ø    Boost the Consumer Spending and hence the Economy

Exactly 2 YEARS back ( 29 Sept 2017 ) , in my email to the Cabinet Ministers , I put forward my logic ( for abolition ) , as follows :

·         There will be no incentive for tax evasion / avoidance 

This will be a permanent  FULL STOP to future generation of Black Money

*   With NIL personal tax to pay , all the cash ( black money , no doubt ! ) ,
    lying in bank lockers , will get deposited in official bank accounts , within
    one year

*   All payments will be received by cheques and deposited in Bank Accounts

*   All stashed away Black Money will , somehow , on its own , find its way in bank

     accounts, - including Black Money lying in Foreign Banks , making SIT redundant !

     

*   Savings rate will go up dramatically

*   That will lead to greater purchasing power for all people

*   Leading to higher domestic consumption of FMCG / Consumer Durables

*   This will result in huge collection of GST , offsetting revenue losses

*   Demand will go up , boosting manufacturing

*   With rise in manufacturing , sub-contracting / outsourcing will increase , giving a big

     boost to MSME sector

 

*   If manufacturing goes up , employment / self-employment ,  will go up

*   For a change , we as a Nation , will learn to celebrate , 

     #    Wealth Creation as a means to reduce poverty

     #    World-size Companies to take on the World

*   There will be less pressure on demands for higher salaries / wages

*   If salaries / wages do not rise , inflation will ease

*   Cost of manufacturing too , will go down

*   Era of " Low Cost Economy " will set in motion, VIRTUOUS CIRCLE 

*   Savings will move from gold / land to Financial Assets

*   With a low cost structure , our products / services  will become , internationally

     competitive and exports will go up

*   That will improve our current negative Trade Balance / CAD

*   This ( abolition of Personal Income Tax ) MUST be coupled with SPVs for  :

     #    Infrastructure Projects ( especially Smart Cities / Corridors etc )

     #    Educational Institutions

     #     Skill Development Institutions

     #     Health care Facilities

     #     Solar Power ( Eqpt Mfr / Generation / Transmission / Distribution )

     #     Digital India ( Broadband ) Network


     No questions must be asked as to the source of money invested in such SPVs

    All income ( Corporate Income or Personal Income by way of dividends / interests etc

    ) arising out of investments made in such SPV , must be tax-exempted

    SPVs , themselves , must not need to pay any taxes for 10 years

        

         Take away incentive to evade taxes , thereby stopping future generation

    of Black Money

*    Channel all existing Black Money ( locked up in assets , in India or

      abroad ) into the main stream of economy ( Infrastructure Building )

*    Enable current annual inflow of inward remittances from overseas

      Indians to go up from $ 70 Billion to $ 700 Billion

*    Through rapid development of Infrastructure , generate Self

      Employment for 12 million youth every year

*    Drastically reduce FDI requirement for rapid growth of economy

*    By cutting down on government outlay for Infrastructure , reduce govt

      borrowing from market and consequent debt servicing

*    Raise GDP to 10 % by 2018

Why  is  such a BOLD  step urgently required ?

Current tax regime ,

*   Punishes honest people

*   Penalizes wealth creation

*   Encourages creation of " Black Money "

*   Provides incentive for tax evasion

*   Diverts resources into unproductive assets such as cash / gold / land  etc

*   Stops people from working harder / smarter

With this regime , people tend to ask :

*   Why should I work hard and earn more , if the more I earn the more I pay  ?

      

*   Why not evade paying taxes by hiding real income ?

*   How will I ever be able to buy that 1 room flat costing Rs 50 lakhs ?  I

     need Rs 20 lakhs by way of black money to buy it ! Where do I get that ?

    

*   For every rupee that the government collects from me as tax , only 15

     paise come back to me in the form of civic amenities .

Dear  Policy Makers :

This is the SIMPLEST – EASIEST – CHEAPEST way to revive our ECONOMY , in a permanent manner , without ever needing any other stimulus

There is no stimulus greater than the Human Greed !

( sources :

Don't Ask " How " ?  /                               07  April  2014 

White Holes of Black Money ?   /  03 June 2014 

A CASE FOR ZERO PERSONAL INCOME TAX  /  11 Nov 2014 

What would happen ?  /    29   Sept   2017 

Better late than Never /    20  Sept   2019

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WHY  IS  MY  LOGIC  CRUCIAL  ?

Because it is the only way to achieve our target of $ 5 TRILLION economy by 2024 , since it is guaranteed to set in motion that VIRTUOUS  CIRCLE

I hope Shri Modiji finds a few minutes, to read my suggestion

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29  Sept  2019

Rsvp :  hcp@RecruitGuru.com