This refers to Anjani Kumar’s article “Zeroing in on the ‘parallel economy’” (February 6). The present taxation system is chaotic and fragmented. The government’s sole purpose is collecting revenue, with total disregard for value addition and creation of wealth. Entrepreneurship – the engine of growth and generation of productive employment – is strangulated at every step, by way of multifarious regressive, anti-social and complex indirect taxes. Octroi, excise duty, value-added tax and service tax are a few examples. Every indirect tax instigates tax avoidance, resulting in a loss of direct tax and creation of a “parallel economy”. We should learn from the US tax system and take one step ahead, where indirect taxes are minimal and income tax compliance is 90 per cent against India’s 31 per cent. The fallacy of income tax is that it squeezes the capital. Personal savings, the staple food of economy as capital, is taking refuge in gold and needless property, building a property bubble. Commodity-based subsidy is another wasteful and leaky labyrinth.
Letters can be mailed, faxed or e-mailed to:
The Editor, Business Standard
Nehru House, 4 Bahadur Shah Zafar Marg
New Delhi 110 002
Fax: (011) 23720201
E-mail: letters@bsmail.in
All letters must have a postal address and telephone number
Satish Kapoor Pune
Letters can be mailed, faxed or e-mailed to:
The Editor, Business Standard
Nehru House, 4 Bahadur Shah Zafar Marg
New Delhi 110 002
Fax: (011) 23720201
E-mail: letters@bsmail.in
All letters must have a postal address and telephone number