Preparations for Budget 2025 are in full swing in the country, and expectations and suggestions are being presented from all sides. In this series, famous market expert and investment advisor Prakash Gaba has given an interesting and revolutionary suggestion. He says that if India is to achieve rapid and long-term economic growth, the country should be made a “tax haven”.
Gaba believes that the tax system needs to be completely changed. His suggestion is to eliminate direct taxes like income tax and corporate tax and tax only consumption. This policy will not only boost economic activities in India but will also make India a major attraction for foreign investors.
Meaning of becoming a tax haven
Tax haven means a country where tax rates are very low or non-existent. Such countries become a safe and profitable destination for investors, businesses and wealthy individuals from around the world.
Gaba believes that if India decides to become a tax haven, the country’s economy will see an unprecedented boom. A large number of new businesses will be established in India, foreign investment will increase rapidly, and employment opportunities in the country will also increase.
He said, “By becoming a tax haven, India will not only provide relief to its citizens, but will also be successful in strengthening its economy globally.”
Talk of abolishing income tax and corporate tax
The most important aspect of Prakash Gaba’s suggestion is that income tax and corporate tax should be abolished in the country. He believes that the current tax structure is not only complex, but it is also a major hurdle for businesses and individuals.
Gaba said, “We are moving towards an economy where simplicity and transparency are essential. “Abolishing income tax and corporate tax will not only provide relief to common citizens and entrepreneurs, but will also strengthen confidence in the economy.”
Suggestion of imposing tax on expenditure
Gaba also said in his statement that the government should impose tax only on consumption i.e. expenditure. He explained that imposing tax on expenditure is a transparent and simple system, which will affect every citizen of the country equally.
Giving an example, he said, “If you buy a luxury car, you will pay more tax. But if you spend normally as per your needs, you will pay less tax. This will not only bring transparency in the tax system, but people will also be more conscious about their expenses.”
Foreign investment will get a boost
Gaba says that the creation of a tax haven will increase the interest of foreign investors in India. He said that foreign companies and investors prefer to work in countries where the tax burden is low. If India abolishes income tax and corporate tax and simplifies the tax policy, then large scale investment will come into the country.
This policy will also boost Indian businesses, as they will be able to face global competition.
Increase in employment and economic activities
Gaba also said that this policy will create new employment opportunities in the country. He said, “When businesses get the benefit of lower taxes, they will generate more employment. “This will not only reduce unemployment but will also increase people’s income.”
Also, the government will not face revenue shortfall due to the system of imposing tax on expenditure. In fact, an increase in economic activity may lead to more tax collection for the government.
Is it possible for India to become a tax haven?
However, in a large and diverse country like India, the path to becoming a tax haven will not be easy. This will require not only political will, but also major changes in the financial structure of the country.
Gaba’s suggestion is revolutionary, but implementing it will come with many challenges. The biggest challenge will be how the government will maintain its revenue.
However, Gaba believes that the expenditure-based tax system will not reduce the revenue, but will strengthen the economic structure of the country.
Opinion of other experts
Experts are getting mixed reactions to this suggestion of Prakash Gaba. Some believe that the idea is not practical, while others consider it a bold move.
Some experts say that it is not possible for a developing country like India to choose the path of becoming a tax haven. The country will first have to focus on solving its basic economic problems.
At the same time, some others believe that this policy can be implemented gradually, so that the tax structure of the country can be made simple and effective.
