We are seeing a lot of High Net Worth Individual leaving India, and settling in some of the less tax countries. The problem in India is the high taxes. We have the income tax i.e. direct tax which is high and along with that there is indirect tax which is equally high.
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Like if you are buying a Car then you ĥave to pay the road tax, tax on insurance and other things. So basically first you have to earn more to buy that Car and also you have to pay the tax on it to earn that. Now of we compare the same thing with Dubai, there is no income tax. And then their is 5% Vat on everything which is quite less.
And because of that a lot of HNIs are actually investing in Dubai and getting the long term Visa and enjoying their less tax life. The quality of life is also better out there if we compare that with India. And that's why you will see a lot of HNIs are actually moving to countries where the tax structure is much better and simpler.
Also the thing is if you pay tax once, you don't have to pay the tax again and that's why people usually prefer simple tax structure rather than a complex one like direct and indirect. And that's why the wealth is getting driven away from India. People who are ultra rich are trying to safeguard their capital by moving away from India.
Next is the crypto. People who are actually earning or trading in crypto are also moving away from India and going to countries which are safe for crypto enthusiasts. Like in India you have to pay hefty tax on the crypto, but if you are in Dubai there is less tax and also it is crypto friendly country and thus you can invest safely out there.
Until and unless Government of India does something extra ordinary to keep wealth in India, the wealth will surely go out of India.
