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 :
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
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
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
-----------------------------------------------------------------------------
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
=================================================
29 Sept 2019
Rsvp :
hcp@RecruitGuru.com